By Paul J. Davies
Germany sold 30-year bonds at a negative yield for the first time, in another sign of how investors’ desperation for safe assets is inflating their value.
The bond, set to mature in August 2050, has a zero coupon, which means it pays no interest at all. Yet investors were still willing to pay more than face value to buy €869 million ($965 million) worth of the debt, pushing the overall yield on the bond /zigman2/quotes/211347116/realtime BX:TMBMKDE-30Y +4.76% into negative territory, at minus 0.11%. Yields fall as bond prices rise.
The German sale adds to the roughly $15 trillion of negative-yielding bonds outstanding world-wide, many of which are from European governments or are state-sponsored agency bonds. It also adds to the smaller—but still significant—amount of new bonds that have been sold with a negative yield at issue.
More than $3 trillion of bonds have offered a negative yield when they were first sold since 2016, according to data from Barclays . While this is mostly government and agency debt, it also includes more than $11 billion of corporate debt, from companies such as French drugmaker Sanofi SA and German consumer goods group Henkel AG .
Also at WSJ.com