Draghi Sends Corporate Yields So Negative He Can't Buy Them
- Yields on some company bonds are quoted below minus 0.4%
- Central bank asset purchases now exceed 1.3 trillion euros
Is Draghi Doing Enough to Support Loan Growth?
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The European Central Bank is starting to price itself out of the corporate-bond market as yields plumb such lows that some notes are no longer eligible for its purchase program.
ECB President Mario Draghi’s unprecedented buying of corporate debt has sent borrowing costs tumbling to a record and now yields on some securities are so low they fall outside the ECB’s own criteria. Yields on bonds from Paris’s public transport network have already dropped below the threshold of minus 0.4 percent, while those from Siemens AG, Europe’s biggest engineering company, French train operator SNCF and Sagess, which manages the nation’s strategic oil reserves, are also approaching the cut-off point.