Portafogli e Strategie (investimento) Dall'High Yield al Flight to Quality ... (Vol. IV): Cash is King

[Imark]

Sulla formazione di una bolla di debito da rifinanziare nel periodo 2013-2014 si era già parlato da qualche parte... propongo questo interessante articolo della Reuters...

New European bonds add to 2013-14 maturity bubble

• Reuters, Thursday June 25 2009

* For investment grade, could lead to higher interest costs
* No appetite in bond market for longer maturities
* Extent of problem depends on macro conditions
By Jane Baird

LONDON, June 25 (Reuters) - More than 40 percent of European new corporate bonds sold this year will come due in 2013 and 2014, just when a heavy load of old debt matures that could force companies to struggle for refinancing.

Analysts said that colliding debt profiles could raise costs for all borrowers and make life especially tough for high-yield issuers -- but added that a lot depended on how economic conditions shape up over the next four years.

Profiles of both high-yield and investment-grade debt show heavy maturities for the years 2011 through 2014. In high-yield debt, around $1.5 trillion globally in debt issued in 2006 and 2007 matures from 2011 to 2014, according to CreditSights data.

In Europe's investment-grade euro bond market, the heaviest repayments for existing debt hit in 2013 at 150 billion euros ($211.1 billion) and 2014 at 132 billion, according to figures from ING.

The competition for capital "is poised to be extreme," analysts Louise Purtle and Chris Taggert warned in a recent report.

"No doubt this is a far worse problem for high yield, as investment-grade borrowers are better able to compete for capital," they added. "That said, it does foster a need for higher interest expense across the entire credit quality spectrum."

But that prospect has not deterred European companies this year -- a record year to date for bond issuance -- from raising new money that must be repaid at about the same time.

Thomson Reuters data show that more than 54 percent of the total in new non-financial corporate bonds this year to June 5 comes due from 2011 through 2014, with the heaviest maturities in 2013 and 2014.
Analysts say that the main reason for the problem of coinciding maturities is that companies cannot raise longer-term money.

"Risk appetite hasn't been around for anything longer than seven years," said Jeroen van den Broek, head of credit strategy at ING. "Issues have all been on the short end of the curve, and these maturities are starting to look exceedingly heavy."

An official on the leveraged loan side of a big bank accused investors, rather than borrowers, of being short-sighted.

"The bond market still has nervousness about going longer term. I don't think it's the naivete of the borrowers, I think it's the market that's driving that -- creating an issue for years down the line," he said.


HIGH-YIELD AWARENESS

In the leveraged loan market, plenty of discussion and power-point presentations have alerted all parties to the high-yield maturity bubble, which drops off quickly after 2014 for U.S. loans but extends to 2016 for European loans.

"Some of my banking friends refer to it as the baby boom that derives from all the CDO, CLO, LBO work back in the glory days before 2007," said Virgin Media Treasurer Rick Martin.

Virgin must refinance nearly 3 billion pounds in 2012, in the middle of this period, and aims to act before then.. At end-May it sold one of Europe's few high-yield bonds this year, but with a due date of August 2016 that should miss most of the refinancing bubble.

For most of the bond market in Europe, where the large majority of deals have been from investment-grade companies, the overall maturity profile has yet to become much of an issue.

"It's far too early to worry about a chunk of redemptions coming due in 2013," said SG CIB credit strategist Suki Mann.

"For instance, if market conditions in 2012 are supportive, then it will not be too difficult to refinance an obligation," he said. "The main question will be what's going on with the broader macro picture at that time."

Some analysts say this year's bond issuance boom may prove to be just the start of a longer-term shift in European corporate finance from bank lending to the bond market.

"The crisis of 2008 is going to accelerate the growth of the debt capital market in Europe to look more like the United States," said Gary Jenkins, head of fixed income research at Evolution Securities.

The bond market may grow so much by 2014, if the economy turns around, that it may be able handle the refinancing needed by then, he said.

And if the market does not grow and the economy does not improve by 2014, the number of companies and amounts coming due will be so heavy that banks and investors could be forced to refinance at terms that keep borrowers alive.

"With that much money to be refinanced, it's the market that has the problem," Jenkins said.

He cited the classic conundrum that if a borrower owes the bank $100, he has a problem, but if a borrower owes $100 million, then the bank has the problem.
(Editing by Sitaraman Shankar)

 

[negusneg]

Intanto continua il momento d'oro delle obbligazioni corporate.

Corporate Bonds Show Lehman Doesn’t Matter With 9.2% Return

By Bryan Keogh and Cristina Alesci

July 1 (Bloomberg) -- Nowhere is the recovery in financial markets more evident than in corporate bonds, where Lehman Brothers Holdings Inc.’s bankruptcy is becoming a distant memory.
U.S. investment-grade company debt returned 9.2 percent in the first half of the year, outperforming Treasuries by 13.7 percentage points, the most on record, according to Merrill Lynch & Co. index data. Corporate bonds also did better than the Standard & Poor’s 500 Index of stocks, marking the first time since 2002 that the fixed-income securities outshined both Treasuries and equities.
The gains may be the clearest indication that the more than $12.8 trillion pledged by the government and Federal Reserve to thaw frozen credit markets is starting to pull the economy out of the worst recession since the 1930s. Frankfurt-based Deutsche Bank AG boosted its forecast yesterday for global economic growth next year to 2.5 percent from 2 percent.
“The only way to justify the kind of valuations six months ago is if we were in the process of creating the next Great Depression,” said Joseph Balestrino, a money manager at Pittsburgh-based Federated Investors Inc., which oversees $409 billion of assets.
Yields on investment-grade company securities fell to within 3.31 percentage points of Treasuries yesterday, the least since Sept. 10, according to Merrill’s U.S. Corporate Master Index. Spreads widened to a record 6.56 percentage points on Dec. 5, and the securities lost 6.8 percent in 2008, the worst year on record, as the shock to financial markets from Lehman’s collapse Sept. 15 froze credit markets and sparked a run on Treasuries that caused bill rates to fall below zero.

‘Overblown’ Fears

The rally shows fears that Lehman’s failure would create a domino effect that brought down the financial system were “overblown,” said Arthur Tetyevsky, chief fixed-income strategist at CF Global Trading LLC, a New York-based firm that trades securities for institutional investors, primarily U.S. and European hedge funds.
“Spreads on corporate debt were so out of whack coming into the year, implying default rates that indicated more than 20 percent of all speculative-grade companies would go bankrupt,” said Kevin Sherlock, co-head of loan and high-yield capital markets at Deutsche Bank in New York. “The risk appetite is far more aggressive now than it was three months ago. It’s about where we were last summer at pre-Lehman levels.”
The biggest returns came in the riskiest securities. High- yield, high-risk bonds gained 29 percent, or 34 percentage points more than Treasuries, Merrill Lynch indexes show.

Best Since Milken

The performance is the best since a market for the securities was created in the 1980s by Michael Milken, according to Merrill Lynch’s U.S. High-Yield Master II index. Junk bonds are rated below BBB- at S&P and less than Baa3 by Moody’s Investors Service.
Bond bulls are encouraged by signs the economy may be recovering. Consumer spending rose in May as benefits from the Obama administration’s stimulus plan spurred a jump in American incomes. The 0.3 percent increase in purchases was the first gain in three months, the Commerce Department said June 26. Incomes climbed 1.4 percent, the most in a year, driving the savings rate to a 15-year high. Another report showed consumer sentiment rose in June to the highest level since February 2008.
“The pace of economic contraction is slowing” and “conditions in financial markets have generally improved,” the Fed’s Open Market Committee said in a June 24 statement after a two-day meeting in Washington, where it kept the target interest rate for loans between banks between zero and 0.25 percent.

Treasury Losses

With little need for the safety of government debt, Treasuries lost 4.5 percent in the first half as some of the biggest yields on corporate bonds in at least a dozen years lured investors. The S&P 500 Index gained 3.2 percent, including dividends.
While credit spreads are narrowing, defaults continue to rise. The U.S. speculative-grade default rate jumped to 8.1 percent in May, the highest since October 2002, and may reach 14.3 percent by the first quarter of 2010, according to S&P.
“The easy money has been made,” said Richard Lee, a managing director in the fixed-income trading department of closely held broker-dealer Wall Street Access in New York. “You could have bought any corporate credit in January and February and made out like a bandit.”

Greenspan’s ‘Normal’

Other measures of credit also show improvement. The difference between what banks and the U.S. government pay to borrow for three months, the TED spread, has shrunk to 41 basis points, the lowest since July 2007 and down from 464 basis points in October. A basis point is 0.01 percentage point.
The Libor-OIS spread, an indicator for banks’ willingness to lend, ended yesterday at 0.38 percentage point. That’s approaching the 0.25 percentage point that former Fed Chairman Alan Greenspan has said would indicate that markets were back to “normal.”
The increased demand has helped companies raise a record amount of money selling debt. Sales of corporate bonds surged 24 percent to $734.6 billion in the first half, compared with the same period of 2008, according to data compiled by Bloomberg.
New York-based Pfizer Inc., the world’s largest drugmaker, raised $13.5 billion on March 17 in the biggest bond sale by a U.S. company as part of its fundraising to buy rival Wyeth, Bloomberg data show. Redmond, Washington-based software maker Microsoft Corp. sold $3.75 billion of debt on May 11 in its debut offering.
The commercial paper market has slumped the most ever as borrowers let the short-term debt mature or replace it with bonds. Unsecured commercial paper outstanding plunged 31 percent to $1.15 trillion, the lowest level since September 1998, according to Fed data.
“I have been buying credit the whole year,” said Gregory Nassour, who helps oversee $36 billion as head of investment- grade portfolio management at Vanguard Group in Valley Forge, Pennsylvania. “The excess returns are gigantic.”
To contact the reporters on this story: Bryan Keogh in New York at bkeogh4@bloomberg.net; Cristina Alesci in New York at calesci2@bloomberg.net
Last Updated: July 1, 2009 00:00 EDT

 

[Capirex85]

Intanto continua il momento d'oro delle obbligazioni corporate.

Corporate Bonds Show Lehman Doesn’t Matter With 9.2% Return

By Bryan Keogh and Cristina Alesci

July 1 (Bloomberg) -- Nowhere is the recovery in financial markets more evident than in corporate bonds, where Lehman Brothers Holdings Inc.’s bankruptcy is becoming a distant memory.
U.S. investment-grade company debt returned 9.2 percent in the first half of the year, outperforming Treasuries by 13.7 percentage points, the most on record, according to Merrill Lynch & Co. index data. Corporate bonds also did better than the Standard & Poor’s 500 Index of stocks, marking the first time since 2002 that the fixed-income securities outshined both Treasuries and equities.
The gains may be the clearest indication that the more than $12.8 trillion pledged by the government and Federal Reserve to thaw frozen credit markets is starting to pull the economy out of the worst recession since the 1930s. Frankfurt-based Deutsche Bank AG boosted its forecast yesterday for global economic growth next year to 2.5 percent from 2 percent.
“The only way to justify the kind of valuations six months ago is if we were in the process of creating the next Great Depression,” said Joseph Balestrino, a money manager at Pittsburgh-based Federated Investors Inc., which oversees $409 billion of assets.
Yields on investment-grade company securities fell to within 3.31 percentage points of Treasuries yesterday, the least since Sept. 10, according to Merrill’s U.S. Corporate Master Index. Spreads widened to a record 6.56 percentage points on Dec. 5, and the securities lost 6.8 percent in 2008, the worst year on record, as the shock to financial markets from Lehman’s collapse Sept. 15 froze credit markets and sparked a run on Treasuries that caused bill rates to fall below zero.

‘Overblown’ Fears

The rally shows fears that Lehman’s failure would create a domino effect that brought down the financial system were “overblown,” said Arthur Tetyevsky, chief fixed-income strategist at CF Global Trading LLC, a New York-based firm that trades securities for institutional investors, primarily U.S. and European hedge funds.
“Spreads on corporate debt were so out of whack coming into the year, implying default rates that indicated more than 20 percent of all speculative-grade companies would go bankrupt,” said Kevin Sherlock, co-head of loan and high-yield capital markets at Deutsche Bank in New York. “The risk appetite is far more aggressive now than it was three months ago. It’s about where we were last summer at pre-Lehman levels.”
The biggest returns came in the riskiest securities. High- yield, high-risk bonds gained 29 percent, or 34 percentage points more than Treasuries, Merrill Lynch indexes show.

Best Since Milken

The performance is the best since a market for the securities was created in the 1980s by Michael Milken, according to Merrill Lynch’s U.S. High-Yield Master II index. Junk bonds are rated below BBB- at S&P and less than Baa3 by Moody’s Investors Service.
Bond bulls are encouraged by signs the economy may be recovering. Consumer spending rose in May as benefits from the Obama administration’s stimulus plan spurred a jump in American incomes. The 0.3 percent increase in purchases was the first gain in three months, the Commerce Department said June 26. Incomes climbed 1.4 percent, the most in a year, driving the savings rate to a 15-year high. Another report showed consumer sentiment rose in June to the highest level since February 2008.
“The pace of economic contraction is slowing” and “conditions in financial markets have generally improved,” the Fed’s Open Market Committee said in a June 24 statement after a two-day meeting in Washington, where it kept the target interest rate for loans between banks between zero and 0.25 percent.

Treasury Losses

With little need for the safety of government debt, Treasuries lost 4.5 percent in the first half as some of the biggest yields on corporate bonds in at least a dozen years lured investors. The S&P 500 Index gained 3.2 percent, including dividends.
While credit spreads are narrowing, defaults continue to rise. The U.S. speculative-grade default rate jumped to 8.1 percent in May, the highest since October 2002, and may reach 14.3 percent by the first quarter of 2010, according to S&P.
“The easy money has been made,” said Richard Lee, a managing director in the fixed-income trading department of closely held broker-dealer Wall Street Access in New York. “You could have bought any corporate credit in January and February and made out like a bandit.”

Greenspan’s ‘Normal’

Other measures of credit also show improvement. The difference between what banks and the U.S. government pay to borrow for three months, the TED spread, has shrunk to 41 basis points, the lowest since July 2007 and down from 464 basis points in October. A basis point is 0.01 percentage point.
The Libor-OIS spread, an indicator for banks’ willingness to lend, ended yesterday at 0.38 percentage point. That’s approaching the 0.25 percentage point that former Fed Chairman Alan Greenspan has said would indicate that markets were back to “normal.”
The increased demand has helped companies raise a record amount of money selling debt. Sales of corporate bonds surged 24 percent to $734.6 billion in the first half, compared with the same period of 2008, according to data compiled by Bloomberg.
New York-based Pfizer Inc., the world’s largest drugmaker, raised $13.5 billion on March 17 in the biggest bond sale by a U.S. company as part of its fundraising to buy rival Wyeth, Bloomberg data show. Redmond, Washington-based software maker Microsoft Corp. sold $3.75 billion of debt on May 11 in its debut offering.
The commercial paper market has slumped the most ever as borrowers let the short-term debt mature or replace it with bonds. Unsecured commercial paper outstanding plunged 31 percent to $1.15 trillion, the lowest level since September 1998, according to Fed data.
“I have been buying credit the whole year,” said Gregory Nassour, who helps oversee $36 billion as head of investment- grade portfolio management at Vanguard Group in Valley Forge, Pennsylvania. “The excess returns are gigantic.”
To contact the reporters on this story: Bryan Keogh in New York at bkeogh4@bloomberg.net; Cristina Alesci in New York at calesci2@bloomberg.net
Last Updated: July 1, 2009 00:00 EDT

Scoppiata la bolla che si era creata sui treasury quest'inverno a causa del mostruoso fly to quality, adesso sono andati in bolla i bond a tasso fisso IG.

Dall'IG a tasso fisso c'è da stare alla larga in questo momento.

 

[negusneg]

Scoppiata la bolla che si era creata sui treasury quest'inverno a causa del mostruoso fly to quality, adesso sono andati in bolla i bond a tasso fisso IG.

Dall'IG a tasso fisso c'è da stare alla larga in questo momento.

Secondo me è prematuro parlare di bolla. Io sono ancora dentro, vedo ancora dei margini, soprattutto fra le nuove emissioni...

 

[ginopelo]

Secondo me è prematuro parlare di bolla. Io sono ancora dentro, vedo ancora dei margini, soprattutto fra le nuove emissioni...

anche a me le nuove emissioni stanno dando grandi soddisfazioni, tutte rialzano di 1 - 2 punti al mese, anche quelle IG + discutibili: l'ultimo automotive rimastomi, MAN 2016 è arrivato a 109

 

[lorenzo63]

Secondo me è prematuro parlare di bolla. Io sono ancora dentro, vedo ancora dei margini, soprattutto fra le nuove emissioni...

Mah al momento la vedo anche io cosi' ...e ci sono ancora.

 

[Capirex85]

Secondo me è prematuro parlare di bolla. Io sono ancora dentro, vedo ancora dei margini, soprattutto fra le nuove emissioni...

Ahimè vedo ben poco di interessante nell'obbligazionario attualmente. Lascio volentieri agli altri gli acquisti in attesa di tempi più interessanti... che prima o poi arrivano sempre, basta essere pazienti.

 

[yellow]

La febbre sale e così pure i rischi e le distorsioni:

Nel Trimestre appena concluso,
l'appetito per il rischio ( Junk Bond )
è divenuto famelico,
come segnala F.Rampini
J.P.Morgan, Morgan Stanley, Goldman Sachs
in prima linea nei collocamenti di tali Obbligazioni :

in 3 mesi 41 MLD USD Junk Bond
+81% rispetto al 2008 !

 

[Imark]

Recovery rates: i driver ciclici.

Lettura per l'amico Paolo (Gorgò) e per chiunque volesse interessarsi alla tematica. Premesso il dato - di constatazione anche empirica - per cui dai default in periodi di recessione si recupera meno che da quelli intervenuti in fase di crescita macroeconomica, quali sono i drivers ciclici che intervengono sul recovery rate ?

 

[paologorgo]

Recovery rates: i driver ciclici.

Lettura per l'amico Paolo (Gorgò) e per chiunque volesse interessarsi alla tematica. Premesso il dato - di constatazione anche empirica - per cui dai default in periodi di recessione si recupera meno che da quelli intervenuti in fase di crescita macroeconomica, quali sono i drivers ciclici che intervengono sul recovery rate ?

Grazie...