Granted, we all have different dreams.
I haven't looked but I'm guessing these are on the hard-to-locate list.
And the price to borrow the instrument is a positive number.
From Wolf Street:
NIRP is systematically rotting out basic brain functionality.
Amid rampant market expectations of another and even bigger and grander round of QE by the ECB, which would also be buying corporate bonds and old bicycles, the total amount of bonds with negative yields has risen to nearly $13 trillion, according to Bank of America Merrill Lynch.
The perversion of negative interest rates imposed by central banks such as the ECB, the Bank of Japan, the Swiss National Bank and a slew of others, and the even bigger perversion of negative-yielding corporate debt apparently does a job on investors’ minds.
In a negative-yield environment, you can no longer buy bonds to hold them to maturity because you’d be guaranteed a loss. You’d have to buy them solely on the hopes of even more deeply negative yields in the near future that would allow you to slough off these critters to the next guy before they eat you up.
And this type of thinking has now completely wiped out whatever was left of investors’ capacity to act rationally. Once you start getting into central-bank mandated negative yields, rationality no longer applies because negative-yielding debt is irrational by definition: Why would you pay someone to borrow money from you?
And this type of intellectual short-circuit has now spread to euro-denominated junk bonds. These are risky bonds that are too risky to be considered “investment grate.” They were issued by over-leveraged companies with iffy or negative cashflows and a considerable probability of default, especially during a downturn.
And yes, you guessed it: there are now 14 junk-rated companies with euro-denominated bonds that have negative yields, according to Bloomberg:
- Ardagh Packaging Finance plc /Ardagh Holdings USA Inc.
- Altice Luxembourg SA
- Altice France SA
- Axalta Coating Systems LLC
- Constellium NV
- Arena Luxembourg Finance Sarl
- EC Finance Plc
- Nexi Capital SpA
- Nokia Corp.
- LSF10 Wolverine Investments SCA
- Smurfit Kappa Acquisitions ULC
- OI European Group BV
- Becton Dickinson Euro Finance Sarl
- WMG Acquisition Corp.
What does it even mean if you buy a junk bond with a negative yield?
If you’re lucky and the company does not default, it will redeem the bond at face value, and the company will pay you the face value of the bond on the date when the bond matures, plus accrued interest. Face value and the coupon payments over the term of the bond are all you’re going to get if you hold till maturity....MUCH MORE
