A unique ceremony took place in the Netherlands, where the owner of a perpetual bond issued 400 years ago received its first payment in over three centuries. The bond was sold by a Dutch water authority in 1624 and has survived wars, conquests, pandemics, and natural disasters. Today, it pays interest to its holder at a rate of 13.61 euros per year.
The bond’s story is one of resilience, as it has been passed from hand to hand over the years. In the 20th century, a Dutch-American banker acquired the bond at an auction and donated it to the New York Stock Exchange in recognition of New York City’s Dutch background. The NYSE had not collected any interest since 2004, but Tuesday’s payment ceremony brought in 299.42 British pounds, which were then donated to a local dike museum.
The situation highlights the growing concern over global debt, including sovereign bonds, municipal bonds, and corporate bonds. The federal government spends $1 trillion per year on interest payments, and yields have jumped due to aggressive rate-hiking campaigns. Bond giant Pimco has reduced its exposure to long-term Treasuries, citing concerns about the US debt burden.
Perpetual bonds like this one are a rare phenomenon, offering no maturity date and perpetual interest payments. They were often used in the past to raise funds for specific projects or causes, such as the repair of a dike that was damaged in 1624.
Source: https://fortune.com/2024/12/15/bond-400-years-ago-debt-interest-payments-perpetual-bonds-nyse