The Stupendous Modernity of the First Government Loan for Institutionals in 1555
AbstractIn order to finance the Italian war, Henry II ‘financial advisers have made in 1555 an enormous financial operation in LYON – then the French financial capital: a huge debt consolidation plus a cash issue. This issue was outstandingly “modern” by at least three aspects. 1. The subscription was reserved to the institutional investors --- the merchant-bankers. 2. For the first time, the amortization took the form of a 41-quarterly –constant-annuities system. 3. Because of a huge demand, an incredible system of “assimilation” of new loans has been organized. The end of this loan is as stupendous as its technics: less than two years later, the Royal government defaulted and only 9% of the total issue has been repaid according to schedule.
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Bibliographic InfoPaper provided by ULB -- Universite Libre de Bruxelles in its series Working Papers CEB with number 09-039.RS.
Length: 15 p.
Date of creation: 2009
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Government loans of 1555; Amortization and assimilation technics; Government bankruptcy;
Find related papers by JEL classification:
- G00 - Financial Economics - - General - - - General
- H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
- N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
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