The prospects of being there to recover its maturity are slim. And yet, the 100-year bonds issued by Austria ten days ago were a hit. Investors offered 16 billion euros (about 17.1 billion francs), while the country was looking for only 2 billion. And it was not so much the prospect of an exceptional annual payment that attracted them: at maturity 2120, these bonds offer a coupon of 0.85%. They were issued with a historically low yield for this type of security at 0.88%.
The same move by Israel last April was just as successful. Earlier, Mexico, the Philippines, Ireland, Belgium and already Austria had issued these loans also called “ultra-long”. The United States considered it, but never took action. And yet even Argentina, a customary defaulter, has managed to lure investors into taking out a century-old loan. “The markets have a short memory,” say many analysts to explain this success.
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