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发表于 2011-9-17 13:16
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Current situation
; c% d& K' y! ^7 l( [4 [ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
; D- G- r4 \( t* H' }as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may1 V- p4 x5 g4 a* D# z2 n( W5 f, {
impose liquidation values.# Y. a. |+ h9 {' r6 f, i: p5 \
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In% g, g* F& n9 q: r3 a! M' J* A
August, we said a credit shutdown was unlikely – we continue to hold that view.4 U% v) @* V, T4 m& f- n
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
/ M0 @, u+ z' f6 Jscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets) S( X9 e) R0 L+ m4 a3 u* p8 b
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
m$ d0 H! J, }+ v& dSeptember. Non-financial investment grade is the new safe haven.
: H8 l7 u- |3 j! r6 \: n2 X High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
: N& ?3 r$ k' i: Q" h& ^then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1* C$ P! M; r) }) @$ }( S
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
?0 q, \5 Q8 c5 L8 `4 Haccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade7 a* F% }+ v4 S1 Q
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are y: p8 ^9 L3 o' U
positive for the year-do-date, including high yield.
5 V4 Y) i! ?6 N: p0 Q ]/ H( a Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
( I7 s4 k/ f0 ^' V( ]$ I5 y$ Mfinding financing.
4 E/ }3 N, H( G Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
$ C; N/ H1 H* ?+ Z8 hwere subsequently repriced and placed. In the fall, there will be more deals.4 f. b* p7 y3 n7 s; g
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
1 i9 b9 X1 c; t& Z, S; uis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
2 U! h& U E8 O7 qgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for ~$ S5 f. l! V/ d6 C
bankruptcy, they already have debt financing in place.! h# m0 r' c+ m( g8 K$ q9 H8 g
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain T3 ]: \: U! \( `* m$ ^
today., q. F; n2 T1 |3 g, c% I
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in, [$ ?1 O! R8 _" c" o1 [9 a
emerging markets have no problem with funding. |
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