MSCI Rejects Plan to Add EU Debt to Government Bond Indexes
- Company says investment community is divided on EU’s status
- Bloc is classified as a supranational rather than a sovereign
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MSCI Inc. announced it won’t add debt sold by the European Union to its range of government bond indexes, in a blow to the bloc’s quest to attract a larger pool of investors.
The index-compiler, which consulted on adding EU bonds to its government benchmarks last month, said it will re-evaluate the EU’s eligibility next year. The bloc is currently treated as a supranational issuer, which the EU cites as a key reason why its borrowing costs are higher than those of European governments with similar ratings.