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发表于 2011-9-17 13:16
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Current situation
+ z6 Z/ N8 ^/ q( ]# M- Q2 C The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long, v5 g9 B& t5 c
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
) F, O* M/ w6 A4 l/ ]impose liquidation values.1 X; L) b6 |& l
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
( r2 Q6 g& }: Z5 y, M4 X5 BAugust, we said a credit shutdown was unlikely – we continue to hold that view.
' V; E. }6 n* W$ C The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
7 M5 @6 A% z: sscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.3 I1 F/ t0 ~& v. e: j6 n0 M: g
4 g0 [- L- A+ Z8 ^" T# o+ t
A look at credit markets( h$ | y% e0 A. Y+ h- @; {6 F' F
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in0 k I2 T0 o. X; O; J2 d
September. Non-financial investment grade is the new safe haven.( D d5 J* S( T' {
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%6 c7 ]9 L0 Q1 \& d
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
6 z) ~2 G) f9 d, Z" [8 Dbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
; T+ @! r3 e8 E+ m) }access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade3 r5 } ]' ~/ ~0 D1 t
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are( r9 M/ a# {9 K! e% j: H
positive for the year-do-date, including high yield.
. U" i" z+ \" J Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
% p/ k, i; S- j7 `# c7 p1 w8 Cfinding financing.
+ I+ a% w# G, d; [ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they7 p! X7 ^9 v" j$ l$ m. n, F# Y
were subsequently repriced and placed. In the fall, there will be more deals.; i. ^( Y8 t* {) M6 b y: U
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
" I' B8 H* U; A7 f/ y6 S) C4 Q4 Jis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
1 C) S# s T8 S9 d5 _0 d7 s2 D4 vgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for3 R; n. w' c# W5 M& @2 [1 i8 z
bankruptcy, they already have debt financing in place.
( {6 u8 W5 K! M5 c0 T European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain4 q0 `0 P$ {6 e7 J0 U' G
today.
9 N! ~. ~% {* m% u+ C Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in3 L- M8 b6 L4 y5 @, S3 t; N( Y
emerging markets have no problem with funding. |
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