Issuers exploit demand for 31st century bond

Subordinated perpetual bonds are enjoying a surge of popularity but what is the attraction of a bond whose coupons can be withheld and which may never be redeemed? Nadia Damouni and Saskia Scholtes report

When Telecom Italia issued €850 million of 50-year bonds in March, it was conceivable, even likely, that the company would still be a going concern when the bonds mature. It was also not beyond the realms of possibility that some of the more sprightly investors who bought the bonds at issue would still be managing portfolios at the point of maturity.

But what of the €1.1 billion 1,000-year