And you thought 100 year bonds had a long duration

Disney and Coca Cola issued 100 year bonds about 15 years ago, and made headlines (at least in the financial world) doing it. But those are nothing compared to some New York City bonds with nearly 300 year maturities.

Next month, one of the bonds, issued in 1868 and thought to be one of the oldest active municipal bonds in the country, will come due. And the city stands ready to retire the debt incurred when Winston Churchill’s grandfather came up with the idea of building a road to one of the nation’s first racetracks, which he had opened in what is now the Bronx.

For 135 years, New York City has been dutifully paying 7 percent annual interest on the bonds, which financed construction of the road. On March 1, the owner of one of them is entitled to come forward and collect its face value: $1,000.

The 38 other bondholders have notes that will mature sometime between now and 2147, a mere 138 years away.

A 7% yield for basically your lifetime, and probably your great-grandkids lifetimes sounds like a pretty good deal now. And municipal bonds are tax free too.

What would possess a municipality to issue bonds of this duration?

West Farms, where the track was, and Morrisania, which would share the road, could not afford the improvement. So the towns issued bonds, backed by Mr. Jerome, with unusually long maturities, gambling that their rapidly expanding neighbor would soon absorb them, and their debt.

“Everybody knew because of the shift of population northward, it was only a matter of time before the City of New York was going to annex the territory,” Mr. Ultan said. “So they issued these bonds with the date of redemption so far in the future because they figured that once the City of New York annexed their town, then the City of New York would assume the payment of the bonds — which is exactly what happened.”