France issued its first-ever 10-year bond at a negative borrowing rate today, meaning investors pay, rather than receive, interest for the privilege of owning French sovereign debt, the state debt management agency AFT said.
AFT said that it issued €9.996 billion in long-term bonds, with just under half - or €4.972 billion - in the form of 10-year bonds at a rate of -0.13%.
The agency also issued €2.05 billion in 15-year debt with a coupon of +0.23% and €2.974 billion in 30-year debt at +0.8%.
It is the first time that France, the euro zone's second-biggest economy, has issued sovereign debt at a negative rate with a number of other countries in the currency area - notably Austria, Germany and the Netherlands - already charging investors to buy their bonds.
Official rates in the euro zone as a whole have been negative since 2014 when the European Central Bank lowered its key deposit rate to -0.1%.
The ECB has since cut the deposit rate further, to -0.4%.
But with more easing looking likely after ECB chief Mario Draghi hinted as much last month, the so-called yields, or investors' return, on Europe's safest bonds are falling.
On the secondary markets, where already issued debt changes hands, the yield on 10-year French government bonds already drifted into negative territory in mid-June.
Outside the euro zone, EU members Sweden and Denmark also have negative interest rates, as does non-member Switzerland.
Financially weaker euro zone members Greece and Italy still have to pay more than 2% of interest to find buyers for their government bonds.
Analysts predict yields in Europe will keep falling as Draghi's successor at the helm of the ECB, IMF chief Christine Lagarde, is expected to increase economic stimulus either through rate cuts or quantitative easing.
But the move to more deeply negative yields raises concerns that Europe may be following in the footsteps of Japan, which has been having trouble to revive inflation and growth.