The government issued two tranches on Wednesday, the state treasury reported on 22 April.

Both were zero coupon offerings. The first, which raised €1.5bn, was a “5-year tranche due 28th April 2025 implying a negative yield of -0.185%”, the treasury stated. The second, worth €1bn, was a “10-year benchmark due 28th April 2030 reflecting a yield of +0.078%.”

That means some investors are paying Luxembourg to borrow their money.

The funds will be used to finance the government’s €8.8bn virus recovery package.

The government said the 5-year bonds were oversubscribed by about €2.2bn and the 10-year bonds by roughly €4.8bn, indicating strong investor demand for Luxembourg debt.

Yields on 10-year Germany, Switzerland and Japan bonds are likewise negative, per Bloomberg and Reuters figures posted on Thursday morning. France, the UK and US are all paying well under 1%.

The lead managers on the Luxembourg government bonds were BCEE, BGL BNP Paribas, Banque Internationale à Luxembourg, Deutsche Bank and Société Générale.