 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 g3 O( F. a& k7 d: d3 | O The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
* i: g5 S# V6 [: l& K9 ]/ has funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may( U+ E. t$ T& y
impose liquidation values.
s1 i1 A+ f5 ^+ D. `: H In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In# u- f V$ [/ k; M& S4 @ W
August, we said a credit shutdown was unlikely – we continue to hold that view.% C+ t5 ]' O8 X1 _6 v+ `# I
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension7 g, y/ z8 U1 |0 v+ J, @
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
* n; T; u/ i' G; R
/ c( }+ v. f' X, VA look at credit markets
1 n1 `% N2 n, D( D% n Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
6 T& y1 c2 R# `- f: NSeptember. Non-financial investment grade is the new safe haven.9 D y7 @' @: J* t3 `, ~" N
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
0 |6 k$ g8 y1 B2 B+ a6 \/ H% C1 t" Vthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
, g- B# P2 K) A5 c+ w0 y$ {6 Pbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have- V2 H% U! \$ d% Q: x1 b: K h' o
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
. j& T9 K% ~8 y, f/ \# E YCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are8 y" F) `/ t/ w* q3 v; h
positive for the year-do-date, including high yield.
# p1 I& E. G1 j/ W+ W* B, S Mortgages – There is no funding for new construction, but existing quality properties are having no trouble' A- n9 a. _ m9 L' o
finding financing.9 h! y3 ^/ U2 \5 }+ @& w
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they! j" T+ I, n7 o; \) O; }
were subsequently repriced and placed. In the fall, there will be more deals.4 R& O) i4 j' a* Y
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and# s' l9 k3 i5 v- I+ O2 {7 V
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
9 ^% |; V' K0 |2 ] Hgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
& k! x7 B/ n+ i6 Fbankruptcy, they already have debt financing in place.# K6 `! W# o' h( }1 x/ J4 g4 u
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
' T: s6 _& ]8 z* U# X/ \today.+ M4 B& a* \* i7 q
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
& k a. M5 J5 V. G) ]0 Aemerging markets have no problem with funding. |
|