Yale collects Interest on Dutch Bond from 1648

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stratton
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Yale collects Interest on Dutch Bond from 1648

Post by stratton » Wed Sep 16, 2015 10:57 am

Yale to Be Paid Interest on Dutch Water Authority Bond From 1648
Yale University will receive 136.20 euros ($153) in interest on a perpetual bond issued in 1648 from Dutch water authority de Stichtse Rijnlanden.

The 1,000 guilder-bond ($509), which is written on goatskin, is among five of the world’s oldest bonds that still pay interest, according to Clarion Wegerif, a spokeswoman for the water authority. The money will be paid out on Monday.
The original bond is the second picture.

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Re: Yale collects Interest on Dutch Bond from 1648

Post by nisiprius » Wed Sep 16, 2015 11:07 am

:D I love it, thanks for posting! What rating do you think that bond should have? AAA...A...A...A...A...
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Re: Yale collects Interest on Dutch Bond from 1648

Post by TIAX » Wed Sep 16, 2015 11:33 am

nisiprius wrote::D I love it, thanks for posting! What rating do you think that bond should have? AAA...A...A...A...A...
Sounds like the bond is in default if Yale had to contact the issuer to get its payment.

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Re: Yale collects Interest on Dutch Bond from 1648

Post by alex_686 » Wed Sep 16, 2015 11:38 am

nisiprius wrote::D I love it, thanks for posting! What rating do you think that bond should have? AAA...A...A...A...A...
I would say junk. Bonds should be paying out on a regular basis. This one has skipped payments since 2003. Right now I am trying to figure out it's yield. I am putting in par of 503, cost basis of 24,000 EUR, and a annual payment of 12 EUR, and I am getting a yield of 5 basis points. Does that sound right?

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Re: Yale collects Interest on Dutch Bond from 1648

Post by Day9 » Wed Sep 16, 2015 11:48 am

Yale, which has an endowment of $23.9 billion, paid 24,000 euros to acquire the bond in 2003 as an artifact. The university hasn’t been paid interest since the acquisition, according to the agency.
I would like to announce to everyone that I am offering zero coupon perpetual bonds for my own personal business. I am selling these at a mere $0.01 for face value $1,000 to be paid after an infinite number of years with no coupon payments in the interim. Please send your checks to my address.
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Re: Yale collects Interest on Dutch Bond from 1648

Post by zhiwiller » Wed Sep 16, 2015 12:06 pm

Shouldn't it have to pay in guilders?

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Re: Yale collects Interest on Dutch Bond from 1648

Post by kolea » Wed Sep 16, 2015 12:21 pm

That bond has far more value as a collectible than it does as a financial instrument. I am willing to bet the endowment books its value in those terms.
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Re: Yale collects Interest on Dutch Bond from 1648

Post by dkturner » Wed Sep 16, 2015 12:31 pm

TIAX wrote:
nisiprius wrote::D I love it, thanks for posting! What rating do you think that bond should have? AAA...A...A...A...A...
Sounds like the bond is in default if Yale had to contact the issuer to get its payment.
If a registered bond Yale has to contact the issuer to have the registration changed to the name of the new holder. If a coupon bond Yale has to deliver a coupon to the issuer. Sounds like the boyz at Yale got a tip that their bond was still a live one.

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Re: Yale collects Interest on Dutch Bond from 1648

Post by alex_686 » Wed Sep 16, 2015 12:45 pm

dkturner wrote:If a coupon bond Yale has to deliver a coupon to the issuer. Sounds like the boyz at Yale got a tip that their bond was still a live one.
It's not a coupon bond. The image from the article did not have any attached coupons. Besides, it is a perpetual bonds. That would mean a infinite number of coupons would have to be attached.

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Re: Yale collects Interest on Dutch Bond from 1648

Post by Boglenaut » Wed Sep 16, 2015 12:51 pm

The bond was issued to pay for a small pier in the Netherlands’s Lek river.
I wonder if the pier it paid for is still there?
Last edited by Boglenaut on Wed Sep 16, 2015 12:53 pm, edited 1 time in total.

2retire
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Re: Yale collects Interest on Dutch Bond from 1648

Post by 2retire » Wed Sep 16, 2015 12:52 pm

I read it that they bought the bond for their archives. Someone probably then realized that they could collect money on it and that is why they didn't collect anything since 2003.

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Re: Yale collects Interest on Dutch Bond from 1648

Post by Grt2bOutdoors » Wed Sep 16, 2015 12:56 pm

Boy, Swensen is really stretching for yield......... :greedy :moneybag :greedy
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Re: Yale collects Interest on Dutch Bond from 1648

Post by hafius500 » Wed Sep 16, 2015 1:05 pm

I'm not sure if it is a junk bond or if it has been a junk bond in the past:

Google "bond Hoogheemraadschap De Stichtse Rijnlanden"

Link to books.google.com:

Goetzmann/ Louwenhorst - The Origins of Value: The Financial Innovations that Created Modern Capital

Page 178:
Water board bonds issued during the seventeenth century were generally ... signed by the cameraer...
some were not ... redeemable...

The 5 percent manuscript bond, issued on May 15, 1648 was owed to Mr. ... , his heirs, or ... , indicating that the obligation was transferable...
...
Thus, the water board security appears to have been regarded by buyers as equivalent in risk to the national debt.
The interest rate was reduced to 3,5 % in 1700 and to 2,5 % p.a. later. Inflation and currency conversions "have considerably reduced its value".

See also Wikipedia - Water board (Netherlands):
In the 17th century there were many of these independent local bodies levying their own taxes and administering justice....
Having a rich history dating back to the Middle Ages, they are the oldest governing bodies and the oldest democratic institutions in the Netherlands...
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Re: Yale collects Interest on Dutch Bond from 1648

Post by hafius500 » Wed Sep 16, 2015 1:19 pm

alex_686 wrote:
dkturner wrote:If a coupon bond Yale has to deliver a coupon to the issuer. Sounds like the boyz at Yale got a tip that their bond was still a live one.
It's not a coupon bond. The image from the article did not have any attached coupons. Besides, it is a perpetual bonds. That would mean a infinite number of coupons would have to be attached.
If I recall correctly, the interest is paid to the person who presents the bond to the issuer.
Google doesn't allow me to read the page I quoted a second time.
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Re: Yale collects Interest on Dutch Bond from 1648

Post by nisiprius » Wed Sep 16, 2015 2:07 pm

English holders of Confederate bonds were trying to get the United States to pay up well into the start of the 1900s, with no luck, but maybe the William Pryor Letchworth Museum ought to ask Congress politely about this one:

Image
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Re: Yale collects Interest on Dutch Bond from 1648

Post by TomatoTomahto » Wed Sep 16, 2015 2:13 pm

I keep checking my mailbox, but no sign of a tuition rebate yet. :moneybag

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