If Negative Yields Are a Drug, Europe Is Just Saying No
- Corporates snub record-cheap debt as economic growth slumps
- A reluctance to borrow raises questions about ECB policy
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Valeo SA used to be a stock-market darling until a slowdown in China and changing rules on emissions hammered the shares and hit its credit rating. Yet you wouldn’t know it looking at the debt market where the yield on a Valeo bond due in 2022 slipped below zero last month.
It looks like a golden opportunity for the French auto-parts maker to gorge on ultra-cheap borrowing. But it isn’t interested -- and the restraint tells you everything about the European Central Bank’s uphill battle to revive animal spirits.