 鲜花( 3)  鸡蛋( 0)
|

楼主 |
发表于 2011-9-17 13:16
|
显示全部楼层
Current situation
9 R+ o) t- s- c. }! ~) X The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long j% J( J! g: V" S3 z3 U! d
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
3 j" p4 W$ `% j \+ dimpose liquidation values.0 w& H" I1 S" I$ u
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
4 ^$ Q; y: I, eAugust, we said a credit shutdown was unlikely – we continue to hold that view.
$ n( G5 n: F& R' k+ \ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension" r, T* m$ L2 Q# G4 F
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
6 J8 Z0 d, Y% v- Q3 K% u6 E" ]) l8 D3 ]
A look at credit markets( q+ {) d2 k$ m6 B
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in6 Q9 q8 f% x2 ^2 p% H0 F! N
September. Non-financial investment grade is the new safe haven. N/ P5 `( X: A; p6 e
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
9 f$ @/ N0 k& c. M: `# {5 othen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
% V; S8 U8 z. K$ ]4 Dbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
" O+ i m( N) ^& n! Z' Vaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade! D0 R* D9 h7 h) z! G
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are" P( y) V( D' o; {" z% I' m
positive for the year-do-date, including high yield.
: {+ P4 @) Z/ p Mortgages – There is no funding for new construction, but existing quality properties are having no trouble/ G+ a: W* p) q' R, K5 y
finding financing.
: @5 h9 v0 x& ] `3 D Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they$ m9 m+ |# M- y$ O/ G, ?# t; J( i
were subsequently repriced and placed. In the fall, there will be more deals., I$ g t$ |$ j& D
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
- L* x8 f3 w8 i% v: r- F# z' [is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were6 w( m* e: v, G: Y
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
# q& [0 W; b1 G' |& e, Kbankruptcy, they already have debt financing in place.
% N3 {) e( ] _0 u European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain; r2 X6 n- J2 l' P2 U* k/ n4 e
today.
0 P' A9 F. u% g, _: J Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in8 o# L; L2 S& W- C1 ]2 N" V
emerging markets have no problem with funding. |
|