 鲜花( 3)  鸡蛋( 0)
|

楼主 |
发表于 2011-9-17 13:16
|
显示全部楼层
Current situation
, ~8 J& G# C( y8 n5 |7 d The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
& ]. w) x5 D5 o/ M" J! W+ Fas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may1 ?, j: h! M6 N
impose liquidation values., k+ d( D% p B5 t: z+ k
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
* Y+ m' W" [0 u9 _( ]! tAugust, we said a credit shutdown was unlikely – we continue to hold that view.
/ @0 e T" y9 i6 I0 S The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension/ V' B, v$ C% \7 U$ y! r* T
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
% e( Z: P/ s% @& Q9 j( |' _% k
A look at credit markets
! S7 c5 i/ L' u Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
, x8 O& z' ^6 i6 |; o5 ySeptember. Non-financial investment grade is the new safe haven.' ?* I, x- S+ B8 f8 [. w# h \
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
: i% z+ t; N; Rthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
( y5 t5 N2 X% O' Y! fbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have# |% K# a0 f2 j! S7 W
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade, e% m. r! f! l( E$ A* r
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
, [+ G# _6 _* ?2 Y6 c+ |positive for the year-do-date, including high yield.
3 W* ?9 f; f4 z, D ^( _; c Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
" y) c3 q* v3 E' |$ Ofinding financing.! V/ q& U0 G, z4 @9 E/ t
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they; h- x& Y4 q# Q2 m: j
were subsequently repriced and placed. In the fall, there will be more deals.
0 Z7 s7 ?" w0 u: G* I Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
) v) P" e3 ?7 v4 ~3 N; Q1 G4 Wis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
8 K/ k0 T% D" b* A1 wgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
: w6 X3 U6 `* u" Obankruptcy, they already have debt financing in place.
" Y, ?3 R2 @. d: ~- D8 P European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
' j: l: D* V% Jtoday.
t \* A3 y* ] Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
/ N1 W8 l7 L( h' c& I( G4 V gemerging markets have no problem with funding. |
|