Why would anyone ever buy a 100-year bond?

Earlier this year, the Austrian government placed a €2bn bond issue with a yield of 0.88% – for 100 years. David Stevenson asks why any investor would lend their money to a government for a century.

Austrian Parliament building © JOE KLAMAR/AFP via Getty Images
The Austrian government is borrowing money for 100 years at 0.88% per annum.
(Image credit: © JOE KLAMAR/AFP via Getty Images)

Good morning and welcome to the second in our short series looking at different aspects of the fixed-income investing world. Last week David looked at “fallen angels” – today he asks why any investor would offer to lend their money to a government for a century.

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David C. Stevenson
Contributor

David Stevenson has been writing the Financial Times Adventurous Investor column for nearly 15 years and is also a regular columnist for Citywire. He writes his own widely read Adventurous Investor SubStack newsletter at davidstevenson.substack.com

David has also had a successful career as a media entrepreneur setting up the big European fintech news and event outfit www.altfi.com as well as www.etfstream.com in the asset management space. 

Before that, he was a founding partner in the Rocket Science Group, a successful corporate comms business. 

David has also written a number of books on investing, funds, ETFs, and stock picking and is currently a non-executive director on a number of stockmarket-listed funds including Gresham House Energy Storage and the Aurora Investment Trust. 

In what remains of his spare time he is a presiding justice on the Southampton magistrates bench.