State-contingent debt (SCD) instruments have been proposed as an improvement to sovereign debt markets, but their issuance costs are not well understood. We estimate the SCD premium at issuance and for more than a decade thereafter, employing a quasi-twin bond strategy that uses two very similar French government bonds issued in 1956: one conventional bond and one state-contingent bond with coupons linked to industrial production. At issuance, the expected yield on the SCD bond was 77 basis points higher than its twin. […]