100-year bonds, also called century bonds, are fixed-rate debt securities that pay a set coupon for a full century before returning principal. They exist in a small corner of the fixed-income market, issued by universities, blue-chip corporations, and a handful of sovereign governments during windows when long-term borrowing costs are low. The appeal for buyers is a locked-in income stream measured in generations. The danger is a market price that can swing 25% or more from a single percentage-point move in prevailing interest rates.
How a 100-Year Bond Works
Mechanically, a century bond is a standard fixed-rate bond stretched to an extreme timeline. The issuer borrows money, agrees to pay a fixed coupon on a set schedule, and promises to return the principal in 100 years. That final principal payment sits so far in the future that it contributes almost nothing to the bond’s present value. The coupon stream is what investors are really buying.
Nearly all century bonds carry fixed coupons rather than floating rates. For the issuer, that’s the whole point: locking in today’s borrowing cost for the maximum possible horizon. For the investor, a fixed coupon means predictable income and total exposure to whatever happens to inflation and interest rates over the next hundred years.
Call Provisions
Most century bonds include a call provision, giving the issuer the right to redeem the bond before maturity. If rates fall significantly after issuance, the issuer can call the bond, pay investors back early, and reissue at a lower rate. That’s a win for the borrower and a problem for the bondholder, who gets principal back precisely when reinvestment options have gotten worse.
Callable century bonds typically offer a slightly higher coupon to compensate, and some include a call premium (paying slightly above face value on early redemption). The feature creates an asymmetry that works against the holder: if rates rise, the issuer has no reason to call and the investor is stuck with a bond whose market price has dropped; if rates fall, the issuer calls and the investor misses out on the price appreciation.
Who Issues 100-Year Bonds
The logic for the borrower is straightforward. If long-term rates are historically low, locking them in for a century is the most aggressive version of that bet. The issuer never has to refinance and can spread the cost across generations of revenue.
Universities
The most natural issuers are institutions that expect to exist forever. Yale, MIT, the University of Southern California, Ohio State, and the University of Pennsylvania have all issued century bonds. Penn’s $300 million bond, issued in 2012, directed roughly $200 million toward energy-efficiency upgrades and HVAC improvements across campus, with the rest funding other capital projects.1University of Pennsylvania Facilities and Real Estate Services. Century Bond Program Projects
Corporations
Walt Disney Company issued $300 million in century bonds in July 1993 at a 7.55% coupon, maturing in 2093. Coca-Cola followed the very next day with its own century issuance. Norfolk Southern, the railroad operator, also tapped this market. Corporate century bonds tend to appear in clusters when the yield curve cooperates, then disappear for years.
Sovereign Governments
Austria, Mexico, and Argentina have all issued century bonds. Mexico issued a £1 billion sterling-denominated century bond in 2014 at a 5.625% coupon. Argentina issued $2.75 billion in June 2017 at a 7.125% coupon; the high yield reflected skepticism about the country’s ability to manage debt over a century, and that skepticism proved well-founded when Argentina later entered another cycle of debt distress. Austria’s century bonds carried investment-grade pricing but still handed investors severe losses when rates rose.
Why Prices Move So Much: Duration Risk
Duration measures how sensitive a bond’s price is to changes in interest rates. The longer the duration, the more the price moves when rates shift. Modified duration specifically estimates the percentage price change for each 1% change in yield.
A standard 30-year bond typically has a modified duration between 12 and 20 years. A century bond routinely sits above 25, and bonds issued with very low coupons can exceed 35. The math is driven by the extreme distance to the final principal repayment, which makes that payment’s present value extraordinarily sensitive to the discount rate.
In dollars: if a century bond has a modified duration of 25 and market rates rise by 1%, the bond’s price drops roughly 25%. A 2% rate increase would mean roughly a 50% decline. A 1% rate decrease would produce about a 25% price gain. Compare that to a 5-year Treasury, where the same 1% rate change moves the price only about 4% to 5%.
This matters less if you genuinely plan to hold for 100 years and collect coupons. Almost nobody does. Even institutional holders occasionally need to rebalance, and the exit price depends entirely on what rates have done since purchase.
Austria’s Century Bond: A Real-World Illustration
Austria’s 2017 century bond is the clearest lesson in duration risk. Issued at a 2.10% coupon and originally sold near par, the bond’s price soared as European rates continued falling through 2019 and 2020. At one point it traded above 200, meaning investors had more than doubled their money on paper.2Wiener Börse. AT0000A1XML2 – 2,10% Bundesanl. 2017-2117/3 – Price
Then the European Central Bank and other central banks began raising rates aggressively in 2022 to fight inflation. By early 2026, the bond was trading around 58.70, meaning an investor who bought at par had lost over 40%, and anyone who bought near the peak had lost far more.2Wiener Börse. AT0000A1XML2 – 2,10% Bundesanl. 2017-2117/3 – Price This is a sovereign bond from one of Europe’s most stable economies with no credit issues whatsoever. The entire loss was driven by interest rate movements.
Inflation Erodes the Return
Interest rate sensitivity gets the headlines, but inflation is arguably the more insidious risk. A fixed coupon that looks generous today may buy very little decades from now, and the principal repayment at maturity is nearly worthless in real terms.
The math is sobering. At 3% average annual inflation, $1,000 returned in 100 years has the purchasing power of roughly $52 in today’s dollars. Even at 2% inflation, that $1,000 buys only about $138 worth of goods. The coupon payments carry the same erosion: a $21 annual payment per $1,000 of face value (Austria’s 2.10% coupon) buys progressively less each year for a century.
Real return on a century bond can turn negative during periods of sustained inflation even if the nominal coupon keeps arriving on schedule. An investor collecting 2% to 3% while inflation runs at 4% loses purchasing power every year. Over decades, that compounds into serious destruction of wealth. Treasury Inflation-Protected Securities exist precisely because of this concern, but no one has issued a 100-year inflation-indexed bond.
Tax Treatment for U.S. Investors
Coupon income from century bonds is taxed as ordinary income at the federal level. The IRS treats interest from corporate bonds the same as bank interest or any other investment income: it’s reported annually and taxed at your marginal rate, regardless of whether you reinvest or spend it.3Internal Revenue Service. Topic no. 403, Interest received
If you sell before maturity, any difference between your purchase price and sale price is a capital gain or loss. Given the price swings these bonds experience, that gain or loss can be substantial. A bond purchased at par and sold at 58, like Austria’s example, would generate a significant capital loss that could offset other investment gains.
One wrinkle worth knowing: if a century bond is issued at a discount to its face value, the IRS requires you to include a portion of that discount in your income each year as original issue discount, even though you haven’t received any cash. You’re taxed on income you won’t actually collect until the bond matures or is sold.4Internal Revenue Service. Publication 1212 (12/2025), Guide to Original Issue Discount (OID) Instruments For a bond maturing in 100 years, that phantom income accrues over the entire life of the instrument, making the tax accounting unusually complicated.
Should Individual Investors Buy Them
The typical buyers are pension funds, insurance companies, and endowments. These institutions hold long-term liabilities and need assets with matching durations. A century bond is one of the few instruments long enough to match a pension fund’s payment schedule, which is the main reason century bonds find buyers at all.
That buy-and-hold behavior creates a problem for anyone else: thin secondary markets. Century bonds are issued infrequently and in relatively small amounts, and once institutional buyers absorb them, those bonds rarely trade again. If you need to sell before maturity, finding a buyer at a fair price can be difficult, and the bid-ask spread may be wide enough to eat into returns even in a favorable rate environment.
Credit risk is the final consideration, and it’s genuinely unknowable at this time horizon. A corporation that looks unshakable today may not exist in 50 years, let alone 100. Even sovereign governments face regime changes, economic crises, and restructurings. Argentina issued its century bond with great fanfare in 2017 and was back in debt distress within two years. The 7.125% coupon was supposed to compensate for that risk. Whether it actually does depends on how the next nine decades unfold.
For individual investors, century bonds are almost always impractical. The price volatility is extreme, liquidity is poor, and the tax treatment can create unexpected complications. If the concept appeals as a rate bet, long-dated Treasury bonds or bond funds offer similar directional exposure with far better liquidity and much simpler accounting.