, Columnist
The Perils of the Ultra-Long View on Bonds
The idea of locking in low interest rates with 50- and 100-year debt has a mixed history.
Dystopian vision.
Photographer: Hannelore Foerster/BloombergThis article is for subscribers only.
Last week, Italy began selling a new 50-year bond, following the lead of countries including Spain, Belgium, South Korea and France that have tried to lock in low interest rates in the past year. Ireland, Belgium and Mexico have gone even further, offering “century bonds” that won’t mature for 100 years. Corporate borrowers are testing the waters with “ultra-long” bonds.
The borrowers and lenders drawn to these so-called Methuslah bonds have good reason to feel that they are on solid ground: Such debt been around for centuries and has often been fruitful.