Issuers and investors are rapidly coming to terms with the idea that negative yields will become a permanent feature of the financial institutions bond market. Debt capital markets officials say that it is now only a matter of time before a bank plucks up the courage to sell a new senior bond with a sub-zero yield, following examples set in the covered bond market.
The pace at which interest rates have plummeted in the last month has certainly been dramatic. Five year euro mid-swaps were down at minus 21bp in late June, when Helaba reintroduced
FIG investors to the concept of negative yielding new issuance with the sale of a new