Sometimes a company or a government issues bonds that never mature.
This allows the bond holder to reap benefits for long periods.
While perpetual bonds sound like great long-term investment instruments, they are not.
This 370-years-old bond is still paying interest.
What makes a perpetual bond appealing is that they are transferable.
Some perpetual bonds have been bought and sold countless number of times across generations spanning centuries.
One of the most famous perpetual bonds was the British Consols, first issued in 1751.
But there are some bonds issued way back in the 17th century that are still paying out interest.
The rate was later reduced to 3.5% and then 2.5% during the 17th century itself.
At first, Yale didnt know what to do with it.
Should they archive it?
Should they cash it?
The bond is made not of paper but goatskin, and interest payments were recorded directly on the bond.
The paper addendum to the original bond.
This was necessary to keep the bond alive.
The water authority told Young that the bond is one of five that is known to exist.
There have been many instances in history when institutions issued debt with very long tenure.
In the 17th century, people sometimes issued perpetual debt.
Yales bond is an extremely early example of a security that was issued without maturity and still pays interest.
One ought to be astounded that such a thing exists.
Professor Rouwenhorst himself collected 26 years worth of interest from the bonds possession.
