LCR investor: no fear of negative yields

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By Bill Thornhill
08 Aug 2019

A senior bank investor buying for his firm’s liquidity coverage ratio (LCR) portfolio told GlobalCapital on Thursday that he does not fear negative yielding covered bonds. What he fears is a glut of long dated issuance that he cannot buy. But issuers remain unwilling to bring serious size with a negative yield.

Negative yields on covered bonds were not a problem as long as they paid a return over six month or three month Euribor, he said:“Anything that’s higher than the deposit rate is good." 

He added that he also bought senior preferred bonds for a separate portfolio for ECB collateral ...

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