E.On opens new field of negative yields: how much will investors tolerate?

By Alex Radford
22 Aug 2019

E.On has opened a new era. While several investment grade companies have printed bonds at negative yields before, few have come close to the -0.149% at which the Baa2/BBB rated German power company reached with the five year wing of its €1.5bn dual tranche deal on Wednesday.

As the recent rally in benchmark rates ploughs more and more of the bond market into negative territory, further negative yielding notes look likely. Market participants do not know how low rates will go, or what corporate bond investors will put up with.

E.On’s €750m five and 10.5 ...

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