 |
|
|
|
|
|
 |
|
|
|
| Swiss, Mexican Bond Deals Represent Milestones for Debt |
| Mexico, 13.04.2015 |
|
| Switzerland is first with 10-year bond at negative yield as Mexico lines up 100-year euro bond
Until Wednesday, no country had ever sold 10-year debt that gives investors a yield of below 0%. And no country had ever issued a 100-year bond denominated in euros.
But in the latest stark sign of how easy the era of easy money has become, Switzerland on Wednesday sold 10-year bonds that investors are actually paying to hold, while Mexico lined up a rare transaction to borrow euros it promised to repay a century from now—at a yield of 4.2%.
The two extraordinary milestones reflect Europe’s extraordinary environment.
Even as the U.S. Federal Reserve prepares to raise interest rates, the European Central Bank is forcefully driving them down. The Swiss National Bank, eager to keep its currency from soaring too far above its eurozone neighbors’, has itself shoved interest rates below zero.
The consequence is a strange collection of monetary phenomena: The ECB has begun charging commercial banks to keep money on deposit. Denmark’s central bank has furiously printed kroner to mitigate a flood of capital into the country. Even Spain, which once looked on the cusp of fiscal collapse, is able to sell short-term Treasury bills that give investors back less principal than they started with.
These plummeting yields—which mean higher bond prices—have delivered bumper returns for existing bondholders. And they have led to exceptionally cheap deals for borrowers. Also winning from the stimulus are stock investors: Most European indexes have rallied this year, and some are at or near record highs.
But the Swiss and Mexican deals push boundaries of yield and maturity even further. Several European countries inside and outside the eurozone have sold government debt with maturities of up to five years at negative yields, which means investors effectively pay for the privilege of holding it. They could profit if they sell the bonds at even higher prices.
Switzerland sold a total of 377.9 million Swiss francs (about $391 million) of bonds maturing in 2025 and 2049. On the 10-year slice, the yield was minus 0.055%, compared with 0.011% on its most recent similar bond two months ago. In the secondary market, the prices of Swiss bonds maturing up to 11 years in the future have risen so much that their yields have tipped into negative territory.
In January, Switzerland’s central bank, worried about the consequences of buying huge volumes of euros to keep the franc suppressed, scrapped its upper limit on the franc and cut deposit rates to minus 0.75%. Foreign-exchange markets were thrown into turmoil. Given that putting cash on deposit costs money, the very modestly negative yield of the new 10-year bond is marginally attractive. A similar story is playing out in the eurozone, where the ECB has set its deposit rate at minus 0.2% and aggressively bought bonds. By
Emese Bartha in Frankfurt,
Chiara Albanese in London and
Anthony Harrup in Mexico City
odkaz na stránku |
|
|
|
|
|
|
|
|
|
|
|
|
Address : Euro-Brew Ltd., Hlboká 22, 917 01 Trnava, Slovakia
Tel. : +421 33 53 418 53, Fax : +421 33 53 418 52, E-mail : info@eurobrew.sk |
|
|
