Investors buy German debt at negative rates

Staff Writer
Columbus CEO

FRANKFURT, Germany (AP) — Investors have bought billions of euros in German treasury notes that pay negative interest — meaning the purchasers agreed to pay a small fee for the privilege of lending the German government their money.

The negative yield is a sign of the stresses in the 18-country eurozone, where the economy is struggling to maintain a weak recovery.

Germany auctioned 3.34 billion euros ($4.3 billion) Wednesday in two-year notes at an average yield of minus 0.07 percent.

Rates are very low all over, and German debt is considered ultra-safe, so security-minded investors are paying for safety. Expectation the European Central Bank will buy bonds has also driven yields down. And the yield is still a better alternative than the minus 0.2 percent that the ECB charges banks deposit money with it.