Fitch: Negative Yielding Sovereign Debt Total Falls to $10.9 Trillion

NEW YORK--()--The universe of negative yielding sovereign debt fell to $10.9 trillion as of September 12th, according to Fitch Ratings. Japan remains the largest contributor to the total, accounting for 63% of negative-yielding debt outstanding, despite a $1 trillion decrease in the country's total since June 27th. The global universe decreased primarily due to yields for longer-dated maturities (more than seven years) moving into positive territory.

European countries remain a fixture in the negative yielding sovereign debt universe, as all countries with negative-yielding debt besides Japan are in the continent. As a group, European countries also have the lowest aggregate yields, with Germany leading the way at negative 30 bps. By contrast, the comparable average yield on $38 trillion in investment-grade (IG) sovereign debt from 34 countries is 84 bps.

"Despite slight increases in yields recently, the amount of negative-yielding debt remains a bellwether for the challenges fixed income investors globally face in an ultra-low yield environment," said Robert Grossman, Head of Macro Credit Research.

The result of low and negative yields is a sharp cut in investment income for sovereign investors globally. Fitch calculates investors in the $38 trillion of IG sovereign debt are prospectively earning nearly $500 billion less annually in investment income than they would have earned with yields available in 2011.

Banks, insurers and pension funds have also felt the pinch as central bank asset purchase programs, negative rate policies and investor demand for longer-dated paper have flattened and lowered yield curves significantly.

The full report, "Negative Yielding Sovereign Debt: Global Total Falls back to $10.9 trillion in September," is available at www.fitchratings.com.

Additional information is available at 'www.fitchratings.com'.

Related Research

Negative-Yielding Sovereign Debt (Global Total Falls Back to $10.9 Trillion in September)

https://www.fitchratings.com/site/re/887694

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings
Robert Grossman
Head of Macro Credit
Macro Credit Research
+1-212-908-0535
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Bill Warlick
Senior Analyst
Macro Credit Research
+1-312-368-3141
or
Jonathan Boise
Associate Director
Macro Credit Research
+1-212-908-0622
or
Gabriel Foguel
Analyst
Macro Credit Research
+1-212-908-0506
or
Media Relations:
Alyssa Castelli, New York, +1 212-908-0540
Email: alyssa.castelli@fitchratings.com

Contacts

Fitch Ratings
Robert Grossman
Head of Macro Credit
Macro Credit Research
+1-212-908-0535
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Bill Warlick
Senior Analyst
Macro Credit Research
+1-312-368-3141
or
Jonathan Boise
Associate Director
Macro Credit Research
+1-212-908-0622
or
Gabriel Foguel
Analyst
Macro Credit Research
+1-212-908-0506
or
Media Relations:
Alyssa Castelli, New York, +1 212-908-0540
Email: alyssa.castelli@fitchratings.com