Henkel and Sanofi sell first negative yielding euro corporate bonds

We have the first ever negative yielding euro corporate bonds sold by non-state owned companies.

German consumer goods group Henkel is selling €500m worth of two-year debt with a yield-to-maturity of minus 0.05 per cent, writes Gavin Jackson, the FT’s Capital Markets Correspondent.

The company will also be selling €700m of five-year debt with a yield of zero per cent.

Sanofi, the French pharmaceutical business, will join in the action later, issuing three-and-a-half year debt yielding less than zero, alongside both six-year and ten-year bonds.

Deutsche Bahn, the German state-owned rail company, became the first ever non-financial company to sell negative yielding debt in July. The €350m bond yielded -0.006 per cent.

Euro corporate bond yields have plunged to record lows this year as the European Central Bank has slashed rates deep into negative territory and bought billions of euros of both government and corporate bonds.

The average euro-denominated corporate bond yield hit a record low 0.61 per cent at the end of August, according to Bank of America Merrill Lynch indices.