Germany Sells Zero-Coupon 2-Years

Demand for nation’s first zero-coupon issue reflects safe-haven buying.

Germany got bids for more than the maximum 5 billion-euro ($6.3 billion) target at a note sale, with the yield falling to a record, as investors sought a refuge from the European debt crisis.

Germany, the only country in the euro area with a stable outlook on its AAA rating, sold 4.56 billion euros of two-year securities carrying a zero-percent coupon for the first time, Bundesbank data showed today. The securities were auctioned to yield 0.07 percent. The country offered a fixed-interest payment of 0.25 percent when selling similar-maturity notes on April 18.

‘Extreme Nervousness’

The average yield on German bonds dropped to 1.43 percent on May 17, the lowest since at least 1992, according to Bloomberg and EFFAS indexes. A post-Greek-election poll of 1,253 Bloomberg subscribers found 57 percent expect at least one country to leave the monetary union this year.

Page 1 of 2

Copyright 2016 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


Advertisement. Closing in 15 seconds.