rusher14:

For a bond to be oversubscribed means there's investor confidence of the system.

It is a pity we have a lot of educated numbskulls in Nigeria . Really quite a LOT. ( In no way is anybody in particular referenced ) There is a dearth lack of critical thinking skills in most adults in Nigeria evidenced by MMM Pursuits, politics of development and tribalism and blind patriotism or just plain cranial malfunction .

We, the youth , and the future of this country is being indebted for future years to come . Our oil blocks are being mortgaged for future .
We ( Our GOVT.)made [b]plans [/b]that we need 1B dollars but because it was " oversubscribed " we collected extra $6b . For what exactly ?? so now that we have extra $6B , we will try and cook up another fishy project to siphon excess cash..., what manner of planning is ? And what do you mean by oversubscribe ?? the bond rate is one of the worst in the world . According to the pic uploaded and the web url given below , Our bond rate is similar to Greece. THAT is how risky they see our bond .... if you look the rate for the Switzerland , it is - 0.11% so investors actually pay the Swiss to buy their bond .... while others are favorable... as for Nigeria, we are in the same class with Greece, 7.87% an almost failed state about to be kicked out of EU if they don't continue with the conditions attached to their bailout fund . Our Media spins it as " over subscribed " and most people are jubilation.... the future of Nigeria is really dire if the youth think like this . It is almost hopeless .......

Anyway , what do i know ... my 2cents

https://twitter.com/dondekojo/status/829976975078981632/photo/1

teflondoncuzo:
.

You that is wise why can't u just explain it or keep ur fingers to yourself n don't start typing trash

Who am I that you should believe what I say? Someone tried to explain it resulted in argument because people with half knowledge are portraying themselves as knowledgeable. You can save yourself the hassle and go to wikipedia and get the right info this is why we don't make progress in this country, we remain ignorant because we never want to engage our brains.

adminlo:


It is a pity we have a lot of educated numbskulls in Nigeria . Really quite a LOT. ( In no way is anybody in particular referenced ) There is a dearth lack of critical thinking skills in most adults in Nigeria evidenced by MMM Pursuits, politics of development and tribalism and blind patriotism or just plain cranial malfunction .

We, the youth , and the future of this country is being indebted for future years to come . Our oil blocks are being mortgaged for future .
We ( Our GOVT.)made [b]plans [/b]that we need 1B dollars but because it was " oversubscribed " we collected extra $6b . For what exactly ?? so now that we have extra $6B , we will try and cook up another fishy project to siphon excess cash..., what manner of planning is ? And what do you mean by oversubscribe ?? the bond rate is one of the worst in the world . According to the pic uploaded and the web url given below , Our bond rate is similar to Greece. THAT is how risky they see our bond .... if you look the rate for the Switzerland , it is - 0.11% so investors actually pay the Swiss to buy their bond .... while others are favorable... as for Nigeria, we are in the same class with Greece, 7.87% an almost failed state about to be kicked out of EU if they don't continue with the conditions attached to their bailout fund . Our Media spins it as " over subscribed " and most people are jubilation.... the future of Nigeria is really dire if the youth think like this . It is almost hopeless .......

Anyway , what do i know ... my 2cents

https://twitter.com/dondekojo/status/829976975078981632/photo/1

The real ignorance is not understanding the meaning of oversubscribed! "Oversubscribed" simply means you offered to sell $1B in bonds and you had more money offered to you than you asked for. It does not mean you borrowed all the money!! We did not collect any extra $6B!!!! It is impossible to under the terms and rules of a bond offering.

The reason why the issue of oversubsribtion is news is because it is used as an indication of confidence. There are people who will ask for loans of $1b and they won't get subscribers...which means people lack confidence they will get their money back.


The truth is stable countries are offering bonds at low yields, 1% and even lower. So while our bonds were oversubscribed (meaning there was huge demand for them) it hides the fact that we are paying above the odds for it, we are paying the same sort of interest rates that distressed countries are paying. You could argue that we could have gotten it at a lower interest (yeild)

vodutive:


Who am I that you should believe what I say? Someone tried to explain it resulted in argument because people with half knowledge are portraying themselves as knowledgeable. You can save yourself the hassle and go to wikipedia and get the right info this is why we don't make progress in this country, we remain ignorant because we never want to engage our brains.

I did that before even posting but I didn't really get the gist that's why I ask for a better and simpler explanation

teflondoncuzo:



I did that before even posting but I didn't really get the gist that's why I ask for a better and simpler explanation

http://www.investopedia.com/university/bonds/bonds1.asp

The bold part is all you need to know


Have you ever borrowed money? Of course you have! Whether we hit our parents up for a few bucks to buy candy as children or asked the bank for a mortgage, most of us have borrowed money at some point in our lives.

Just as people need money, so do companies and governments. A company needs funds to expand into new markets, while governments need money for everything from infrastructure to social programs. The problem large organizations run into is that they typically need far more money than the average bank can provide. The solution is to raise money by issuing bonds (or other debt instruments) to a public market. Thousands of investors then each lend a portion of the capital needed. Really, a bond is nothing more than a loan for which you are the lender. The organization that sells a bond is known as the issuer. You can think of a bond as an IOU given by a borrower (the issuer) to a lender (the investor).

Of course, nobody would loan his or her hard-earned money for nothing. The issuer of a bond must pay the investor something extra for the privilege of using his or her money. This "extra" comes in the form of interest payments, which are made at a predetermined rate and schedule. The interest rate is often referred to as the coupon. The date on which the issuer has to repay the amount borrowed (known as face value) is called the maturity date. Bonds are known as fixed-income securities because you know the exact amount of cash you'll get back if you hold the security until maturity.

For example, say you buy a bond with a face value of $1,000, a coupon of 8%, and a maturity of 10 years. This means you'll receive a total of $80 ($1,000*8%) of interest per year for the next 10 years. Actually, because most bonds pay interest semi-annually, you'll receive two payments of $40 a year for 10 years. When the bond matures after a decade, you'll get your $1,000 back.

Debt Versus Equity
Bonds are debt, whereas stocks are equity. This is the important distinction between the two securities. By purchasing equity (stock) an investor becomes an owner in a corporation. Ownership comes with voting rights and the right to share in any future profits. By purchasing debt (bonds) an investor becomes a creditor to the corporation (or government). The primary advantage of being a creditor is that you have a higher claim on assets than shareholders do: that is, in the case of bankruptcy, a bondholder will get paid before a shareholder. However, the bondholder does not share in the profits if a company does well - he or she is entitled only to the principal plus interest.

To sum up, there is generally less risk in owning bonds than in owning stocks, but this comes at the cost of a lower return.




Why Bother With Bonds?
It's an investing axiom that stocks return more than bonds. In the past, this has generally been true for time periods of at least 10 years or more. However, this doesn't mean you shouldn't invest in bonds. Bonds are appropriate any time you cannot tolerate the short-term volatility of the stock market. Take two situations where this may be true:

1) Retirement - The easiest example to think of is an individual living off a fixed income. A retiree simply cannot afford to lose his/her principal as income for it is required to pay the bills.

2) Shorter time horizons - Say a young executive is planning to go back for an MBA in three years. It's true that the stock market provides the opportunity for higher growth, which is why his/her retirement fund is mostly in stocks, but the executive cannot afford to take the chance of losing the money going towards his/her education. Because money is needed for a specific purpose in the relatively near future, fixed-income securities are likely the best investment.

These two examples are clear cut, and they don't represent all investors. Most personal financial advisors advocate maintaining a diversified portfolio and changing the weightings of asset classes throughout your life. For example, in your 20s and 30s a majority of wealth should be in equities. In your 40s and 50s the percentages shift out of stocks into bonds until retirement, when a majority of your investments should be in the form of fixed income.

PassingShot:
Too many "bad news" for wailing zombies today already.

"wailing zombies" Can zombies wail? NO. Can WAILERS be zombies? NO
Zombies will always accept every lie hook line and sinker just like you've done.
Wailers are wailing cos of the high cost of the loan (7.8%) normally should be around 2%.

we are wailing for a better 9ja.

vodutive:


http://www.investopedia.com/university/bonds/bonds1.asp

The bold part is all you need to know


Have you ever borrowed money? Of course you have! Whether we hit our parents up for a few bucks to buy candy as children or asked the bank for a mortgage, most of us have borrowed money at some point in our lives.

Just as people need money, so do companies and governments. A company needs funds to expand into new markets, while governments need money for everything from infrastructure to social programs. The problem large organizations run into is that they typically need far more money than the average bank can provide. The solution is to raise money by issuing bonds (or other debt instruments) to a public market. Thousands of investors then each lend a portion of the capital needed. Really, a bond is nothing more than a loan for which you are the lender. The organization that sells a bond is known as the issuer. You can think of a bond as an IOU given by a borrower (the issuer) to a lender (the investor).

Of course, nobody would loan his or her hard-earned money for nothing. The issuer of a bond must pay the investor something extra for the privilege of using his or her money. This "extra" comes in the form of interest payments, which are made at a predetermined rate and schedule. The interest rate is often referred to as the coupon. The date on which the issuer has to repay the amount borrowed (known as face value) is called the maturity date. Bonds are known as fixed-income securities because you know the exact amount of cash you'll get back if you hold the security until maturity.

For example, say you buy a bond with a face value of $1,000, a coupon of 8%, and a maturity of 10 years. This means you'll receive a total of $80 ($1,000*8%) of interest per year for the next 10 years. Actually, because most bonds pay interest semi-annually, you'll receive two payments of $40 a year for 10 years. When the bond matures after a decade, you'll get your $1,000 back.

Debt Versus Equity
Bonds are debt, whereas stocks are equity. This is the important distinction between the two securities. By purchasing equity (stock) an investor becomes an owner in a corporation. Ownership comes with voting rights and the right to share in any future profits. By purchasing debt (bonds) an investor becomes a creditor to the corporation (or government). The primary advantage of being a creditor is that you have a higher claim on assets than shareholders do: that is, in the case of bankruptcy, a bondholder will get paid before a shareholder. However, the bondholder does not share in the profits if a company does well - he or she is entitled only to the principal plus interest.

To sum up, there is generally less risk in owning bonds than in owning stocks, but this comes at the cost of a lower return.




Why Bother With Bonds?
It's an investing axiom that stocks return more than bonds. In the past, this has generally been true for time periods of at least 10 years or more. However, this doesn't mean you shouldn't invest in bonds. Bonds are appropriate any time you cannot tolerate the short-term volatility of the stock market. Take two situations where this may be true:

1) Retirement - The easiest example to think of is an individual living off a fixed income. A retiree simply cannot afford to lose his/her principal as income for it is required to pay the bills.

2) Shorter time horizons - Say a young executive is planning to go back for an MBA in three years. It's true that the stock market provides the opportunity for higher growth, which is why his/her retirement fund is mostly in stocks, but the executive cannot afford to take the chance of losing the money going towards his/her education. Because money is needed for a specific purpose in the relatively near future, fixed-income securities are likely the best investment.

These two examples are clear cut, and they don't represent all investors. Most personal financial advisors advocate maintaining a diversified portfolio and changing the weightings of asset classes throughout your life. For example, in your 20s and 30s a majority of wealth should be in equities. In your 40s and 50s the percentages shift out of stocks into bonds until retirement, when a majority of your investments should be in the form of fixed income.

Thanks for the info

Abudu2000:
Your birth certificate is an apology letter from the condom factory.

Oga e no funny, oloribu, omo ose

Nigeria started borrowing before your birth but you believe the country will collapse now!

davidif:


Wait what?? the govt is borrowing money that they are going to have to pay significant interest on and you are jubilating?

The real ignorance is not understanding the meaning of oversubscribed! "Oversubscribed" simply means you offered to sell $1B in bonds and you had more money offered to you than you asked for. It does not mean you borrowed all the money!! We did not collect any extra $6B!!!! It is impossible to under the terms and rules of a bond offering.

The reason why the issue of oversubsribtion is news is because it is used as an indication of confidence. There are people who will ask for loans of $1b and they won't get subscribers...which means people lack confidence they will get their money back.


The truth is stable countries are offering bonds at low yields, 1% and even lower. So while our bonds were oversubscribed (meaning there was huge demand for them) it hides the fact that we are paying above the odds for it, we are paying the same sort of interest rates that distressed countries are paying. You could argue that we could have gotten it at a lower interest (yeild)

Another bundle of a waste of space being rather ingenious in ignoring the pertinent issues of the future of the youth and country as regards the weight of the debt on our collective future but prefer focusing on the rather mundane topic of over subscription. if you read between the lines you will observe a subtle comparison between the stable ( eg :Switzerland) and the distressed ( eg:Greece) . By simple deductive reason . the argument for lower yield is there but then , The empty waste of space will prefer we spell it out letter by letter but then , the argument will not lead to better result because No Investor will pay any thing lower just like MMM offering mouth watering 30% . Of course it will be oversubscribed.....

anyway, let me sleep... just my 2cents

https://www.youtube.com/watch?v=mRmGmM_bAV8

Nigeria's Eurobond sale begins in London

Agood bargain here www.nairaland.com/4247879