The unprecedented worldwide surge in the market for bonds that are certain to lose money if held to maturity regained strength last month.
The total face value of negative-yielding corporate and sovereign debt in the Bloomberg Barclays Global Aggregate Index of investment-grade bonds jumped to $11.6 trillion as of Sept. 30, up 6.1% from a month earlier. That sum had fallen for two months in a row from June's $11.9 trillion peak.
Demand for the safety of high-quality bonds pushed up the totals in all but two of the 13 countries with more than $100 billion in negative-yielding debt. Italy's tally shrank by 9% to $361 million and Denmark's expanded more than a third to $104 million.
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Japan, where policy makers moved in last month to coax yields up, remains ground sub-zero with almost $6 trillion, about half of the global total. Western Europe accounts for 47%, the bulk from France, Germany, the Netherlands, Spain and Italy.
Less than a seventh of the world's negative-yielding debt is owed by businesses. Finance companies issued the bulk of those corporate bonds, almost 80%, with original face values totaling $1.3 trillion.
Sovereign and corporate debt totals include both new negative-yielding issues and bonds with prices that rose enough to push their yields into the money-losing zone. The Bloomberg Barclays Global Aggregate Index has a market capitalization of $48 trillion and includes investment-grade debt from 24 developed- and emerging-economy markets.
The benchmark gauge does not include maturities of less than a year, which tend to have lower yields, so the value of many short-term less-than-zero bonds aren't counted in this story. Because the totals are based on as-issued amounts, they also don't take into account a small amount of buybacks.
Bloomberg News
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