A worrying sign in bonds

Austria's century-long bond has proved extremely popular. But as John Stepek explains, that's not necessarily a good thing.

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A 100-year IOU: will she be good for it?
(Image credit: traveler1116)

Austria this month became the first eurozone nation to sell a "century" bond an IOU that matures 100 years from its issue date in public markets. Both Ireland and Belgium have sold 100-year bonds, but only as private placements (ie, sold direct to a handful of interested buyers) and in amounts of just €50m-€100m. Austria, on the other hand, raised €3.5bn from the sale, priced at a yield (interest rate) of 2.1%. So it's a first for a currency that's been in use for less than 20 years, and for a country that has only been independent for 62 years.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.