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10-Year Notes at Negative Coupons Hit Covered-Bond Market

  • Denmark’s Jyske Bank sets record in callable mortgage market
  • Until now, only short-term mortgage bonds had negative rates
Residential Housing As Denmark Rejects Plan To Split Troubled Loans

Photographer: Freya Ingrid Morales/Bloomberg

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In the world’s biggest covered-bond market, a Danish bank says it’s now ready to sell 10-year mortgage-backed notes at a negative coupon for the first time.

It’s the latest record to be set in a world that’s being dragged down by ever lower interest rates. In Denmark, where Jyske Bank A/S will offer 10-year mortgage bonds at a fixed rate of minus 0.5%, average Danes will borrow at rates far lower than those at which the U.S. government can sell its debt.