Corporate bond yields turn negative as investors seek safe haven assets

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Corporate bond yields for Swiss food manufacturer Nestlé have traded at negative yields as growing risk aversion culminates in investors being effectively prepared to pay for storing cash at the Aa2 ranked food giant.

European bond yields have been driven into negative territory in the wake of the ECB’s announcement to initiate its €60bn a month quantitative easing programme.

Yields on Nestlé’s four year bonds dropped to minus 0.008 per cent while yields for Siemens, Vodafone and other Aa graded companies also traded close to 0%. The oil company Shell also saw its bond yields temporarily dropping into negative territory.

Corporate bond yields follow the trajectory of sovereign bonds, with Swiss sovereign bond yields turning negative, as reported earlier. Meanwhile, German 10 year yields have dropped below those of Japan, currently trading at 0.306%.

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