 鲜花( 3)  鸡蛋( 0)
|

楼主 |
发表于 2011-9-17 13:16
|
显示全部楼层
Current situation
& j0 ?8 {. ]% G$ b+ q8 v The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long: [$ b! U& w g0 u
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may. e* T3 x/ I Y
impose liquidation values.
8 u" W1 s' }+ t2 O7 U' y In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In9 F- \: J6 e; J( {
August, we said a credit shutdown was unlikely – we continue to hold that view.7 ?' t) l1 r! Z8 J% [
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension+ l+ Q8 [+ i9 S; Y
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
2 q: S; A5 o$ ~, C
6 d" g# m# ?" ?# a/ P& p) E: @A look at credit markets+ @# K" n5 ]5 s# c6 n, g
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
o0 u9 f G0 ]& Q3 R2 z" `September. Non-financial investment grade is the new safe haven.
0 M7 _9 M' Q; ]$ `; m, { High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%- a# h9 E" U) [) ~* _; u
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1( V n7 E5 e/ j
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have/ Y. {0 ~9 b2 h
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade) z3 v' b6 g! }9 d
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
0 w' t( E! w5 c# E6 ?positive for the year-do-date, including high yield.# ]# Q R0 W& n+ M( ]
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
4 ]4 T z6 V: x$ ofinding financing.
" }$ J: B( h" { Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
) _! S L" y0 [' Y: V" r8 z7 d& Vwere subsequently repriced and placed. In the fall, there will be more deals.
6 ^2 @; w: N6 r$ Q0 d! B% h Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
! ~" y+ v" z* t/ gis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
* L$ J2 b+ O: l+ `; I1 v5 \. Wgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
, b) b) b3 @; E% Y/ jbankruptcy, they already have debt financing in place.# D. E1 T; h4 @) X& S# b
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
/ a5 a) d0 F. `" D% xtoday.
/ ]+ G# Q/ M& ?6 m, M b M Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in% Q" e' J+ t3 F& T, m
emerging markets have no problem with funding. |
|