Century Bonds Won’t Last Long

31.03.2016 • Gold and Natural Resources

From Port Phillip Insider (AUS) –

As healthcare improves and the population ages, perhaps it’s only natural that the duration of loans should lengthen too.

As The Age reports:

Ireland sold its first so-called century bond, less than three years after it regained economic sovereignty by exiting an international bailout program.

The nation’s debt office sold €100 million of the securities at a yield of 2.35 per cent by private placement through Goldman Sachs Group and Nomura Holdings. Last year, Mexico sold the world’s first 100-year government notes in euros.

There are two ways to look at this.

First, if you can get someone to lend you money at 2.35% for 100 years, why wouldn’t you take advantage of that generosity?

Second, it’s as sure a sign as any that if a government wants to lock in debt repayments at this low rate, it must have some belief that interest rates won’t stay low for long.

-Read More Here-

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