'Reality sinking in' over negative yielding new issues, say FIG bankers

By Bill Thornhill, Tyler Davies
08 Aug 2019

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 ...

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