Austria goes long, starts sale of century-long bonds

If there is one market that is definitely in a bubble it is the ultra-long bond market, one that is primarily utilized by debt-ridden governments.

The latest country to adopt the ultra-long bond instrument is Austria, a nation that became the first in the eurozone to sell a 100-year bond. This comes several months after Vienna issued a 70-year bond earlier this year.

Although Austria isn’t the first country to start selling century-long bonds, it is the first type of debt that has been sold into public, not private, euro markets. Other countries have embraced the 100-year bond, including Argentina, Ireland and Belgium (SEE: ‘At least cockroaches would pay off the debt’ – Argentina sells 100-year bonds).

The Wall Street Journal reports that the 2117 bond is likely to garner a price that is about 60 basis points above the yield of the 1.50 percent 2047 bond. Also, BofA Merrill Lynch, Erste Group, Goldman Sachs International Bank, Natwest Markets and Société Générale CIB were the joint lead managers of the dual transaction.

It is a good thing that Great Britain is exiting the European Union (EU), or at least is trying to, before the ship sinks even further.

The Trump administration is considering selling 50- or 100-year bonds in the United States.

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