Austria issued government bonds with record negative interest rates


The Republic Austria on Tuesday raised 1.15 billion euros on the capital market with a negative interest rate. The returns have "absolute record lows"said the spokesman for the Federal Financing Agency, Christian Schreckeis, to APA, With negative interest, investors pay a "premium" that they can lend the state money because they seek a "safe haven" for their money.

The Federal Financing Agency (OeBFA) manages the financial debts of the federal government and, among other things, manages the issuing of federal bonds. Currently, the Federal Government's financial debt amounts to € 207.48 billion with an effective interest rate of 2.04 percent per annum and an average remaining term of 10.3 years.

Interest rate slide continues

As reasons for the renewed yield depression at Austrian government bonds Among other things, the OeBFA spokesman sees the global slowdown, subdued inflation data, geopolitical uncertainties and market-expected measures ECB at their next interest rate meeting on 12th September. Austrian government securities are sought after by investors.

The Federal Financing Agency On Tuesday, it was able to increase the 10-year Federal bond issued in January by 575 million euros with a return of minus 0.494 percent. In addition, the 5-year bond issued for the first time in June was increased by EUR 575 million, with a return of minus 0.798 percent. For the first issue, the five-year paper yielded an issue yield of minus 0.435 percent, while the 10-year bond reached a positive return of plus 0.073 at its most recent reopening in early June. The interest premium too Germany remained unchanged, in June and today it was 28 basis points.

With the two Bund auction has the Federal Financing Agency Around 70 percent of the 2019 funding program has been completed for the federal government. Three emission dates are planned until the end of the year.

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