Investors are now paying to hold European Financial Stability Facility debt, after six-month t-bills sold at a negative yield at auction for the first time ever.
Germany's central bank, which managed the issue, said the rescue fund placed €1.488bn of 6-month bills at a yield of -0.0113%. The bailout fund has continued to attract solid demand with the bond markets pressuring Spain and Italy, pushing their borrowing costs up to around the 7% level for 10-year paper. The 7% yield is seen as the point at which borrowing becomes unsustainable over the long term - Greece, Ireland, and Portugal crossed the 7% threshold shortly before they each had to seek an international bailout. Two-year yields on debt issued by Germany, Switzerland, the Netherl...
To continue reading this article...
Join Investment Week for free
- Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
- Get ahead of regulatory and technological changes affecting fund management
- Important and breaking news stories selected by the editors delivered straight to your inbox each day
- Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
- Be the first to hear about our extensive events schedule and awards programmes