Investors Pay Again to Lend Germany Money

Investors Pay Again to Lend Germany Money

Investors paid to lend Germany money for six months at a debt auction on Monday, the country’s central bank said, as they continue to scramble for the safe haven of Europe’s top economy.

The yield, or rate of return, at the auction of six-month debt was a record low of minus 0.499 percent, said the Bundesbank, which organised the sale.

At its last auction of six-month bonds on July 9, the average yield was minus 0.0344.

A negative yield means that investors are actually paying to lend Germany money as they are afraid of parking it elsewhere amid continued eurozone market turmoil.

Germany sold 3.77 billion euros’ ($4.6 billion) worth of the six-month paper but received 4.75 billion euros’ worth of bids, showing demand was strong despite the negative yield.

As bond market players flee debt-wracked countries such as Italy and Spain, fearing they may never be repaid, they have ploughed money into core eurozone nations like France and Germany, seen as safer investments.