Austria Slakes Thirst for Yield with Plans for ‘Century Bond’

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Two years ago Austria broke records in debt markets by selling €3.5bn of 100-year bonds, the Financial Times reported. Now the central European country is eyeing another “century bond” as investors clamour for long-dated instruments in a world awash in ultra-low, and even negative, sovereign yields. Vienna plans to issue €3bn of five-year bonds and also test investor demand for up to €1bn of 100-year bonds, according to one banker close to the deal. Last time, in September 2017, the century bond was heavily oversubscribed, drawing bids of €11.4bn. Today the 2117 bond provides investors with a yield to maturity of 1.12 per cent, having experienced a sharp rally since it was issued with a coupon of 2.1 per cent. The price rise reflects investors’ desperation for income, as central banks keep a firm lid on bond yields through hints of further monetary stimulus. Read more