May
26
Negative Rates in Europe Prompt Demand for Investment Safeguards
ByCredit markets in Europe are so distorted that investors are demanding assurances they won’t have to pay borrowers for lending money after key benchmark interest rates turned negative.
Debt issuers from Volkswagen AG to a subsidiary of Rabobank are inserting clauses into their deal documents to protect creditors from having to pay if rates on their investments fall below zero. The euro interbank offered rate, which is dropping, is a benchmark for a notional amount of more than $180 trillion of debt including asset-backed securities, corporate loans, floating-rate bonds and exchange-traded derivatives, according to the European Money Markets Institute…
Negative Rates in Europe Prompt Demand for Investment Safeguards
