 鲜花( 3)  鸡蛋( 0)
|

楼主 |
发表于 2011-9-17 13:16
|
显示全部楼层
Current situation
4 C. M+ o |: e/ A7 K$ p The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long" z: `7 A% g3 n/ b2 U8 F d8 h
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
7 n8 S0 P" h! X! m Simpose liquidation values.: u, F- \4 N, n, g8 s: G$ O% n
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In7 u. ?7 H% c, R$ C" g
August, we said a credit shutdown was unlikely – we continue to hold that view.
4 ?* n& o% j- n1 G V$ O' P: _ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
' ]3 I2 w' `0 Q. ?$ Yscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.+ p" k. A. t- z3 M q
/ N6 Z& H+ c5 B% P e4 a; E' K( N
A look at credit markets# R+ C9 E% K f
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
, E$ i" P! e; _7 |; gSeptember. Non-financial investment grade is the new safe haven.- N9 |0 ^8 N- h+ p, o! a4 b
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%* w1 {; X+ }* d7 I. _
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
9 o) v# u9 k; r& L7 _0 O& l% j( ]billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have! U8 x( L/ ?3 s4 `
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade; D: L0 a; c* z, ~
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are& W9 z; J( [; B" H
positive for the year-do-date, including high yield.' x0 h# k8 I& ~( y
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
# G$ m y$ R7 [6 Ofinding financing.
6 s6 M2 {' ^ b, `% ~. \% j+ V Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
) j8 u; D; O8 S$ n- S( lwere subsequently repriced and placed. In the fall, there will be more deals.
0 P* k. C8 j$ O( m: o6 {5 B- e: Y Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and) ^& L4 p9 g& F) ~1 X4 p, K; ^
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
8 q5 Z" `$ Y/ d# \going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
8 \4 t; ]& _6 R9 z7 K# ]0 abankruptcy, they already have debt financing in place.
% P U9 T* w/ }& W! C European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
4 | u$ J2 C( B' O4 O( ]today.
& j( R+ `/ F) g, l6 y Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in: q) W7 q6 L$ Z/ F' W/ J: {
emerging markets have no problem with funding. |
|