Yeh you read the above correct. Negative interest rates play the tricks mentioned above. Normally, one would expect to RECEIVE interest on deposits (or a bond investment) and PAY interest on a loan balance (bond outstanding).
But the mandarins of high finance (read the central bankers) have devised this “innovative” solution to induce the world economy out of coma. Heres a piece by WSJ.
How is it expected to work? Simply put, these negative rates are supposed to put out a red carpet for all the borrowers out there to borrow to their hearts content and somehow kickstart the economy with private capital spending. The savers can go take a hike. This is what the central bankers are implying. Its as convoluted as it sounds and implications beyond the grasp of even savvy bond investors. This implies that there would no longer be a coupon payment (as yields are negative arent they?). So bond investors would be forced to think like equity investors and seek capital gains.