A column on the MoneyWeek website is titled: Bond bubble? What bond bubble? By John Stepek
Quote from the article:
"Iraq has issued $1bn-worth of five-year debt. The deal was seven times oversubscribed. In other words, investors were queueing around the block to buy this stuff. So much so that the country was able to knock the yield down by 0.25% to 6.75%. (...) As Bloomberg columnist Marcus Ashworth puts it: “This would seem to define the very idea of a credit bubble: a wholly insufficient reward for what must be seen as a considerable risk, as Iraq is still in the midst of a serious civil conflict in the most unstable region in the world.” As Ashworth puts it: “Return of capital seems to have taken a back seat to a decent coupon.”
Now I have no idea about the quality of this MoneyWeek magazine, but am I right to believe that it's very hard to get a decent yield on bonds anywhere in the world? And thus that even very conservative institutions are chasing yield?
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