Austria has been putting out its feelers to see whether there is enough investor appetite for a 100-year bond sale. It's a first for the bloc of eurozone nations, and there has been no shortage of orders.
Austria's debt management office said Tuesday that the planned 100-year bond would end on September 20, 2117, in what would be the first "century bond" to be sold publicly by a eurozone nation.
Office spokesman Christian Schreckeis said there had been no shortage of orders, with more than 11 billion euros ($13.1 billion) in potential investment logged shortly before the closing of the books.
A successful sale would demonstrate that demand for super-long bonds, whose prices are sensitive to interest rate changes, remains solid even as central banks start winding down their crisis-era stimulus measures.
Money back in a century
Austria is planning to sell its bonds through a syndication, using a group of banks including Bank of America Merrill Lynch, Goldman Sachs, NatWest Markets and Societe Generale.
This should secure a larger issue size and a strong secondary market, analysts say.
"If the deal happens, it will show that these ultralong products are still very much on and investors are not expecting interest rates to go anywhere soon," said a banker familiar with the matter.
Last year, Austria already sold 2 billion euros of 70-year sovereign bonds. They're currently yielding about 1.81 percent, so a yield of roughly 2.0 percent could work for a 100-year bond, experts believe.
hg/jd (Reuters, dpa)