More inflation-linked bonds from non-sovereign European issuers could be a feature of the debt capital markets in 2005 as the inflation derivatives market grows.
The success of Italy’s 30-year, 2.35% BTPei last September and Cades’s e1 billion 15-year inflation-linked benchmark bond in November, the French agency’s longest inflation-linked bond to date, showed how demand for linkers has grown with the need to match real liabilities.
The fact that breakevens have widened since the first European linkers were issued shows investors are also ready to receive a lower yield in return for inflation.
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