 鲜花( 3)  鸡蛋( 0)
|

楼主 |
发表于 2011-9-17 13:16
|
显示全部楼层
Current situation: i- \) [6 L3 L M' }) ?7 V( G- b
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
8 ^0 {& l( n' t( ] V2 {6 mas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may/ }8 R: L3 K- A2 F" u: F( I
impose liquidation values.
9 @! M# c- W& `0 ^. J2 r In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In4 {# M0 Z) f# a' U1 x
August, we said a credit shutdown was unlikely – we continue to hold that view.
. i/ ^% l) f- g3 v+ U: X% r The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
* U' }+ v9 y0 R8 V' nscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.* ?2 e M) R9 A' e/ W& \: c$ G
: `" [2 v/ v$ q5 z5 R
A look at credit markets
3 D0 _% a) m1 e. ?* i/ z7 N Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
' x) v3 E4 F b# U5 G5 h, z. W) jSeptember. Non-financial investment grade is the new safe haven.
5 p( A6 \+ }. ~/ j- P E2 r+ t7 Z9 ~ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%7 z8 E0 O4 M; L- p
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
; m! R0 {/ @" h$ k) w( M* U* P: dbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
9 u2 \& A! D$ Z" raccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade, \% K: O" J$ w+ z T. h7 W
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
& L/ j/ g& W/ o) S2 qpositive for the year-do-date, including high yield.
( t# a/ ~$ ] i Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
5 J9 E) F% l. o; dfinding financing., a* w5 j6 S( n/ r, g
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
/ u# k; \5 B. F- p! T# ^were subsequently repriced and placed. In the fall, there will be more deals.) E, l# w g; p/ ? R
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
8 N4 o4 c. |3 Ris now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
1 k$ b9 B2 e' cgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for U G+ T7 C8 ]" W
bankruptcy, they already have debt financing in place.3 P7 w i, }( I
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain P/ j- J; W5 f: s! @% K5 D
today.
% @" R" p _6 K5 b' J Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in# u4 ~3 ?/ h+ q* e: e
emerging markets have no problem with funding. |
|