 鲜花( 3)  鸡蛋( 0)
|

楼主 |
发表于 2011-9-17 13:16
|
显示全部楼层
Current situation
2 s7 `& J% z) H' ^ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long. u: b* L t3 l; v* u ]" d
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
! o% \. h7 Y+ v7 \% vimpose liquidation values.# d' E# I M* `. v. y
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In2 v2 G9 F5 B. b4 W1 a& t' O3 Y! a
August, we said a credit shutdown was unlikely – we continue to hold that view.) E/ D$ i. k3 ^! j- E. o
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
' i+ o1 C* r! Q2 ~( Ascrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.* s' [4 l# E( _) U0 ~" K
/ X: ~" R; G0 b3 TA look at credit markets
9 W9 P: i. S/ F5 x7 E; l Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in$ X. X4 c% Q0 q' y& B$ a
September. Non-financial investment grade is the new safe haven.7 E0 `# e/ \8 o+ H: h
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
) X1 B$ ]$ O, K3 v1 z" \, X; E! x2 Cthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $19 H9 `- h1 Z s$ R5 }& k
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
7 ~4 @2 K5 N5 G0 j3 B' E, ~access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade) y! M" ^8 [' U/ ?0 b4 L* Z
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
w" X6 ?' \) {6 d1 I( l. Dpositive for the year-do-date, including high yield.
' O: \2 o5 g7 \! F9 m Mortgages – There is no funding for new construction, but existing quality properties are having no trouble& ~; N0 C5 }6 H% w/ [( P
finding financing.
) m: w& {, j* d9 y7 r8 J+ c0 s Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they5 M M! D- c7 ~( C
were subsequently repriced and placed. In the fall, there will be more deals.
( @- q' L: y5 i% M$ D# D6 A Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
& _# Q+ _ w7 C1 ^- O9 X, Jis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were$ f2 P7 |) d# c" k& U
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for& y# Z+ a* u5 w* Z7 x* E7 o
bankruptcy, they already have debt financing in place.
5 ]2 F3 F. X) S8 ^7 e' i6 a+ J9 Q European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain( L" K4 t0 F! D, L
today.' K6 a- r$ l# J8 f! }) v
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in/ g% M$ @! S6 Z
emerging markets have no problem with funding. |
|