VW CAN CHANGE THE GERMAN ECONOMY… AND BEHIND VA THE UE

The funds of VW have suffered a hard blow for the scandal of the emissions. The annual cost of assuring 10 millions of Eurus of debt of VW in front of the unpaid one during five years by means of covering contracts, or swaps, practically he has tripled to 214.000 Eurus - a level that associates more with the companies with valuation of "voucher garbage". In spite of the uncertainty on the eventual cost that would have to support VW, the figure could seem rigorous if one keeps in mind the solid generation of liquidity of the company.  

If the impact of the current crisis, Fitch is excluded it locates the flow of free box around 5.000 million annual Eurus in 2016-17, after the payment of dividends. But the severity of the trial of the market owes herself partly to the excessively favorable climate that the corporate borrowers have enjoyed.  

VW is a great depredator in the credit markets, in Europe, the makers of cars not represent 9,2% of the index of corporate funds financial iBoxx whose value ascends to 824.000 million Eurus. VW supposes 30% of the sector: it is not a company to which you can ignore. Also, the group has been key for the investors that to the being a German company, VW didn't suffer the problems for those that passed other signatures settled down in countries with fiscal crisis. 

Thanks to the process of search of profitability, VW has been able to sell funds with coupons low and long expirations. This conjunction of factors was alarming. In January, VW emitted a voucher of 1.000 million Eurus to 15 years that he pays a coupon of only 1,625%. This voucher has already suffered two big variations of prices this year: between April and June he fell about 15 points from a maximum of 106% of the face value, when being shot the profitability of the German public debt, 

With the explosion of the scandal of the emissions, it lowered other eight points, and on Wednesday it quoted at 85,6, according to the data of FactSet. This type of volatility of the prices is not good for the investors that are centered in the values with investment grade, but also sample that the price of the funds didn't allow anything that the perfection that guaranteed, was not now he/she is discovered, falsely the mark VW. 

VW has also been a great originator of hybrid funds - debt with bigger yield that the rating agencies equip practically to the actions. It was a winning proposal when there were not clouds that threatens the credit market; however, the hybrid of VW have suffered with the sales. The lack of liquidity in the secondary markets neither is helping. Finally, the news of VW have already added more uncertainty to some markets altered.  

I am already saying it since the case of the trap of the emissions auto regulated to deceive the official controls exploded and my position is completing; a mark (anyone) he can have a construction failure and their accusation and repair doesn't alter more than some days its value and its mark consideration but the case VW is not an error it is a calculated swindle and that it is absurd because I believe that it was easier and cheaper to maintain a permanent device that regulated the emission of the polluting gas the legislation it USA it not demands more than 80 milligrams of nitrogen oxides (NOx) emitted by traveled kilometer, if the catalyst was able to rectify the emission of until 3 quantity more of this gas to pass the controls is absurd not to have maintained it active in all moment of the conduction of the vehicle. 

Then it is evident that if it was not made I roast it is because with this device the car should suffer an alteration in its operation of such a caliber that has been little less than unmarketable in the market and alone I am happened that the motor gets off power in such a way that if the trap the driver was not disconnected has noticed an important fall of power that has impeded the competitiveness of the model VW in the world market.