Negative Rates in Europe Prompt Demand for Investment Safeguards - Bloomberg
The euro interbank offered rate, which is dropping, is a benchmark for a notional amount of more than $180 trillion of debt including asset-backed securities, corporate loans, floating-rate bonds and exchange-traded derivatives, according to the... While holders of Banco Popular Espanol SA’s asset-backed bonds weren’t asked to make a coupon payment in April after rates dropped below zero, Stockholm-based Nordea Bank AB said this month it plans to charge investors on some new mortgage bonds... “The concept of an investor paying rather than receiving a coupon is unprecedented and illogical,” said Tracy Chen, a Philadelphia-based money manager at Brandywine Global Investment Management, which oversees $66 billion of assets. New Clauses Volkswagen has packaged leases on its cars into bonds for the past 19 years and inserted a clause safeguarding investors for the first time last month. Euribor fell below zero this year for the first time since Bloomberg started collecting the data at the end of 1998. The three-month rate crossed the threshold in April and is at a record-low of minus 0. 013 percent, while the one-month gauge is... Source: www.bloomberg.com
