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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.

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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.

germy

 

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