The Stupendous Modernity of the First Government Loan for Institutionals in 1555

Gallais-Hamonno, Georges ()
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Gallais-Hamonno, Georges: Centre Emile Bernheim, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles, Brussels and LEO, University of Orleans, France.

No 09-039.RS, Working Papers CEB from Université Libre de Bruxelles, Solvay Brussels School of Economics and Management, Centre Emile Bernheim (CEB)

Abstract: In 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.

Keywords: Government loans of 1555; Amortization and assimilation technics; Government bankruptcy (search for similar items in EconPapers)
JEL-codes: G00 H63 N23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-his
Date: 2009

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