He was unable to obtain the desired amounts

Representative index of European companies (Markit iBoxx Euro Corporate) debt is passed over the level reached shortly after the bankruptcy of Lehman Brothers at the time when the financial world heaving dangerously. A progressive return to grace. Investors have rediscovered the charms of an old instrument, the first obligation rated a French company, one of the company's path of railway Paris-Saint-Germain who was welcomed on the Paris stock exchange in 1838.

Debt is bloated, but the trend remains total. 175 Billion euros of bonds of European companies, excluding financial sector and category "investment grade" (1), issued on the first five months of the year, found lessee and without the slightest concern. So that the previous record of 2001, EUR 200 billion, is about to be sprayed. Even individuals, through the EDF loan, are involved. "Since the beginning of the year, emissions in euro were met with a very significant demand on the part of investors, thus finds Hanna Stekelorom, responsible for the management of credit at Natixis AM. He was unable to obtain the desired amounts. "Unanimously pushed forward by virtually all management companies, the indebtedness of European societies is the new class of assets with fashion. In Europe, specialized funds collected more than 11 billion euros in the 1st quarter, or nearly three times more that the collection of all of 2008 (4 billion), according to Lipper IMF data. Flows of investors fleeing stocks or wishing to find superior to those of the monetary funds returns. Echaudée by its incursions on the "hedge funds", the private bank including rediscovered the charms and security offered by corporate bonds. The funds with the most collected belong to groups BlueBay, M & G or Invesco. More than 33 new products have emerged in Europe over the first three months of the year. In France, actors, sometimes without experience or legitimacy on this asset class, is there are launched opportunistically, which is not necessarily very reassuring.

Historic opportunity

A window of market as there is rarely appeared at the height of the crisis in the fall. The "spread" (difference between the performance of an obligation of company and a State title), intended to compensate the risk of default of a transmitter, has reached a stratospheric level implicitly incorporating a scenario of end of the world,"with serial bankruptcies. Hence a historic opportunity to purchase which is are engulfed the most daring companies, gradually followed by all the rest of the market. "In the last quarter of 2008, the"spreads"of credit in the euro area have strongly recovered in a context of strong risk aversion, as to be labeled aberrations on historical default rates implied, explains Philippe Berthelot, responsible for the management of credit continental Europe at AXA Investment Managers."

Historically, the report of the performance offered by a duty of company to that of a State title generally ranges between 1.2 and 1.5. However, he jumped above 3 after the bankruptcy of Lehman Brothers, to then fall below this level.

Asymmetric risk

The past year, spiralling in the "spreads" of credit, including on banks, in any case left traces causing a drop in the performance of managers invested on debt issuers Europeans. Therefore, on fifteen months (early 2008-1st quarter 2009), specialized funds gave on average 12.2, according to Citywire. At the top: a Schroders Fund, managed by Adam Cordery and showing a gain of 1.8, followed by a product of Oyster, managed by Andrea Garbelotto, an increase of 0.36. Other products are in red. Since then, the situation has improved, thanks to a great month of April, marked by an increase of 2.7 of the index "investment grade" European. "Today,"spreads"of credit, which are certainly reduced since more top around 320 basis points (index Merrill Lynch Investment Grade), are still very attractive, says Philippe Berthelot.". On a portfolio of four or five years maturity, for the "investment grade" category in euros, can reasonably expect a rate of return actuarial from 5 to 7 for limited risks. "A condition, however, to avoid bankruptcy, infrequent, but growing portfolio. Because the risk is asymmetrical on this asset class. To the maximum, the investor on the debt of the companies is reimbursed, which is not so bad in the current context when offered rates are 6 to 7, while in case of failure, the Manager will only cover a fraction of its investment. However, there is little data and historical references in the rate of recovery in default of a business.

Deteriorated liquidity

Crisis elsewhere, institutional clients ask more managers on the risks of such issuer that they have in portfolio. "Now the systemic risks appear to be excluded, the segment of the credit is more specific issues of the different transmitters to the systematic market risk and the macroeconomic environment," explains Gregory Pesquès, responsible for the management of credit and convertible in SG Asset Management, which notes that since the beginning of the crisis, "liquidity significantly deteriorated in this segment of European debt"investment grade".as evidenced by the gauge of the "spreads" buyer-seller ("bid - ask"), including through a drastic reduction in the activity of market by banks. "Today, yields a significant liquidity premium implicitly incorporate". Emissions are strongly "oversubscribed", from which small amounts of paper available. This "can be problematic in the context of subscriptions high, as is the case for the Fund of credit for a few months already." "Once the programming is placed, the bonds are often then housed in portfolios in an optical"buy and hold"(Editor's Note: detention until the deadline), hence a generally very limited liquidity in the secondary market", said Hanna Stekelorom. If the funds were to know trips important due to an unexpected external shock, they would have difficulties to sell all their titles in good conditions, without incurring losses.