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Funds Buy Negative-Yield Deutsche Bahn Bonds as Choices Narrow

  • Funds bought 57% of the 350 million euro-bond sale, banks 23%
  • More than $10 trillion of notes pay zero-to-negative yields

Funds were the biggest buyers of the first negative-yielding euro bonds sold by a non-financial company, highlighting how central bank stimulus is distorting markets.

Deutsche Bahn AG allocated 57 percent of the 350-million euro ($388 million) bond sale to funds, while banks bought 23 percent, according to a person familiar with the matter who asked not to be identified because they aren’t authorized to discuss the offering. Investors in Germany and Austria bought most of the bonds.