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%.

ABOUT THE AUTHOR
Mona Dohle
Mona Dohle speaks German and Dutch, she is DACH & Benelux Correspondent for InvestmentEurope. Prior to that, she worked as a journalist in Egypt and Palestine. She started her career as a journalist working for a local German newspaper. Mona graduated with an MSc in Development Studies from SOAS and has completed the CISI Certificate in International Wealth and Investment Management.

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