Tags: negative | yield | bond | treasurys

Negative-Yielding Bonds Jump to Almost $12 Trillion After Ebbing

Negative-Yielding Bonds Jump to Almost $12 Trillion After Ebbing

(Dollar Photo Club)

Monday, 03 October 2016 09:48 AM EDT

The unprecedented worldwide surge in the market for bonds that are certain to lose money if held to maturity regained strength last month.

The total face value of negative-yielding corporate and sovereign debt in the Bloomberg Barclays Global Aggregate Index of investment-grade bonds jumped to $11.6 trillion as of Sept. 30, up 6.1 percent from a month earlier. That sum had fallen for two months in a row from June’s $11.9 trillion peak.

Demand for the safety of high-quality bonds pushed up the totals in all but two of the 13 countries with more than $100 billion in negative-yielding debt. Italy’s tally shrank by 9 percent to $361 million and Denmark’s expanded more than a third to $104 million.

Japan, where policy makers moved in last month to coax yields up, remains ground sub-zero with almost $6 trillion, about half of the global total. Western Europe accounts for 47 percent, the bulk from France, Germany, the Netherlands, Spain and Italy.

Less than a seventh of the world’s negative-yielding debt is owed by businesses. Finance companies issued the bulk of those corporate bonds, almost 80 percent, with original face values totaling $1.3 trillion.

Sovereign and corporate debt totals include both new negative-yielding issues and bonds with prices that rose enough to push their yields into the money-losing zone. The Bloomberg Barclays Global Aggregate Index has a market capitalization of $48 trillion and includes investment-grade debt from 24 developed- and emerging-economy markets.

The benchmark gauge does not include maturities of less than a year, which tend to have lower yields, so the value of many short-term less-than-zero bonds aren’t counted in this story. Because the totals are based on as-issued amounts, they also don’t take into account a small amount of buybacks.

 

© Copyright 2025 Bloomberg News. All rights reserved.


StreetTalk
The unprecedented worldwide surge in the market for bonds that are certain to lose money if held to maturity regained strength last month.
negative, yield, bond, treasurys
290
2016-48-03
Monday, 03 October 2016 09:48 AM
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