Mark Gilbert , Columnist

A French Challenge to Gundlach's 'Disaster' Bond Theory

Veolia is the first BBB-rated borrower actually getting paid to sell new bonds.

November 17, 2017 at 1:10 PM UTC

Mark Gilbert is a Bloomberg Opinion columnist covering asset management. A former London bureau chief for Bloomberg News, he is author of “Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable.”

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A record month for inflows into corporate bonds is "setting up a disaster for when rates rise & `investors' learn that, yes, these bonds have rate risk" was yesterday's latest tweeted warning from Jeffrey Gundlach. So what would the billionaire bond manager make of the first BBB-rated borrower actually getting paid to sell new bonds?

French utility Veolia Environnement SA is one of a handful of low-rated borrowers—assessed at BBB or lower by Standard & Poor's—with fixed-rate debt repayable in three years or longer that trades at yields below zero in euros.