Retail appetite helps Goldman sell $1.3bn in 50-year bonds

Goldman Sachs sold $1.3bn in 50-year bonds, benefiting from the voracious appetite of retail investors for higher-yielding securities at a time of historically low interest rates.

Goldman, which originally said it would sell $250m in 50-year debt, sold the bonds on Tuesday in lots of $25 to attract individual investors.

The yield was 6.125 per cent, the low end of earlier estimates. Investors said Goldman was able to get a lower rate by targeting retail investors who were less savvy in valuing an option that allows Goldman to call – or redeem – the bonds after five years.

“This is a company in a sector that we now know is riskier than the rating agencies once let on,” said Jason Brady, a portfolio manager at Thornburg Investment Management.

The bonds, which are due in 2060, help diversify Goldman’s investor base and lock in cheap long-term funding at time when the financial markets are beginning to worry that a new round of Federal Reserve asset purchases will lead to rising inflation.

“This allows Goldman to hedge inflation risk for next five years,” said Gregg Fisher, chief investment officer at Gerstein Fisher, a money management and advisory firm focusing on individuals.

http://www.ft.com/cms/s/0/5f7a5366-e159-11df-90b7-00144feabdc0.html

I will definitely call it the "Goldman bond top".

 

1) Did you buy one for your personal account?
2) It would be a "better" top if they were 100-year bonds instead.