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Germany’s Henkel First NON-Financial Companies to Market Bonds With Negative Yields

This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.

We know that Bank of Japan and other Central Banks, as well as sovereign yield in a number of countries, have gone to negative yields. Now two German non-financial private firms are thinking about selling bonds with negative yields.
(Bloomberg) —  Henkel AG and Sanofi are poised to became the first non-financial private companies to sell bonds that yield below zero.
The German household products maker may sell 500 million euros ($558 million) of two-year bonds that yield negative 0.05 percent, according to people with knowledge of the matter. Pharmaceutical company Sanofi may also sell three-year debt at negative rates, said the people, who asked not to be identified because the information is private.Henkel is issuing the debt as part of a four-part offering. Sanofi’s deal includes three parts.

Now The Balance Begins To Shift

The balance between QE and Treasury supply will begin to shift in July. The underlying bid it has provided for stocks and Treasuries will begin to fade.

This report tells why, and what to look for in the data and the markets.  GO TO THE POST

This is not surprising since corporate bonds have to compete with the government and Germany’s sovereign bonds are carrying negative yields at maturities of less than 15 years.



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