richforever123:


What does discount rate and Implied yield mean

How do I know the interest I am getting?

This is how I see it from my layman point of view. Professionals can define them better later.

I see discount rate as the actual amount of money that's discounted as interest when you invest while Implied yield is the amount/rate you are expected to get if the interest is invested with the principal.

This is how I calculate..Using the picture attached, if I am to invested N1,000,000 in the Series 10 CP, The discount rate is 14.7181% for 268 days.

What I will simply do is to carry my calculator and press;

1,000,000 ÷ 100 * 14.7181= 147,110

147,110 = 365 (Number of days in a year) = 403.041096

403.041096 * 268 (The actual days of the investment) = 108,015.014.

Your Discount rate is N108,015.014. Barring any transaction charges.

This discount/interest rate is given at the begining of the investment. If was given at maturity it will be the actual interest rate. However, since it paid at the begining of the invest it expected that it would have earned same percentage of interest if invested along the principal and that would have resulted in higher interest.

freeman67:


This is how I see it from my layman point of view. Professionals can define them better later.

I see discount rate as the actual amount of money that's discounted as interest when you invest while Implied yield is the amount/rate you are expected to get if the interest is invested with the principal.

This is how I calculate..Using the picture attached, if I am to invested N1,000,000 in the Series 10 CP, The discount rate is 14.7181% for 268 days.

What I will simply do is to carry my calculator and press;

1,000,000 ÷ 100 * 14.7181= 147,110

147,110 = 365 (Number of days in a year) = 403.041096

403.041096 * 268 (The actual days of the investment) = 108,015.014.

Your Discount rate is N108,015.014. Barring any transaction charges.

This discount/interest rate is given at the begining of the investment. If was given at maturity it will be the actual interest rate. However, since it paid at the begining of the invest it expected that it would have earned same percentage of interest if invested along the principal and that would have resulted in higher interest.

Thanks for this explanation ; Just a quick question

is it possible to invest less than 5million on any commercial papers? if yes , how

thanks

freeman67:


This is how I see it from my layman point of view. Professionals can define them better later.

I see discount rate as the actual amount of money that's discounted as interest when you invest while Implied yield is the amount/rate you are expected to get if the interest is invested with the principal.

This is how I calculate..Using the picture attached, if I am to invested N1,000,000 in the Series 10 CP, The discount rate is 14.7181% for 268 days.

What I will simply do is to carry my calculator and press;

1,000,000 ÷ 100 * 14.7181= 147,110

147,110 = 365 (Number of days in a year) = 403.041096

403.041096 * 268 (The actual days of the investment) = 108,015.014.

Your Discount rate is N108,015.014. Barring any transaction charges.

This discount/interest rate is given at the begining of the investment. If was given at maturity it will be the actual interest rate. However, since it paid at the begining of the invest it expected that it would have earned same percentage of interest if invested along the principal and that would have resulted in higher interest.

Thanks Alot

abraolas1:


Thanks for this explanation ; Just a quick question

is it possible to invest less than 5million on any commercial papers? if yes , how

thanks

Most times, the least amount they require is 5M. However, once in a long while you might see something lesser. I have seen 2M before but it's not easy to come by these days.

Who has tried these guys before. What do you think?

amordi:
Who has tried these guys before. What do you think?

Who is the issuing house?

ernie4life:


Who is the issuing house?

Coronation Merchant Bank Limited (

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amordi:
Who has tried these guys before. What do you think?

I have and they are very good. Good enough they are the lead arranger and not some stock broker so you won't pay service charge or commission. However, your interest may be taxed if it is not exempted.

If you are fine with the discount rate then you can give it a try. There's usually a link attached to the mail sent to where you can view their financial reports and ratings for your due diligence.

freeman67:


I have and there are very good. Good enough they are the lead arranger and not some stock broker so you won't pay service charge or commission. However, your interest may be taxed if it is not exempted.

If you are fine with the discount rate then you can give it a try. There's usually a link attached to the mail sent to where you can view their financial reports and ratings for your due diligence.

Alright.... thanks

Check

amordi:
Check

There is a mistake on the maturity. They forgot to edit that part. The year should be 2024. Please info them.

These rates are no longer enticing

amordi:
Check

sirrotex:
These rates are no longer enticing

I tell you

Check

amordi:
Check

Lovely

Now Open | MTN Nigeria Communications PLC Up to N52,895,846,000.00 Series 8 & 9 Commercial Paper Issuance and scheduled to close on Friday, 3 November 2023

Your input guys.

amordi:
Now Open | MTN Nigeria Communications PLC Up to N52,895,846,000.00 Series 8 & 9 Commercial Paper Issuance and scheduled to close on Friday, 3 November 2023

Your input guys.

Rates?

RayRay06677:



Rates?

182dasy - 12.21%
267days - 13.51%

amordi:


182dasy - 12.21%
267days - 13.51%

Always comes with a poor rate

Try this

RayRay06677:
Try this

Who is the arranger ?

amordi:
Who is the arranger ?

how do you guys buy CP?
Is it on the company's website?

amordi:
Who is the arranger ?

Coronation, FSDH etc...

RayRay06677:



Rates?

Yes ooo. Because of their AAA rating they think they can always mop up cash at very low rates. The last one I subscribed with them was even 11%. It was later they pitied themselves and adjusted it to 12%.

However, with the platora of companies seeking funds with rates ranging from 15% and above, who go look them except Pension funds and the likes.

See this ones.

freeman67:
See this ones.

Awesome rates

freeman67:


Yes ooo. Because of their AAA rating they think they can always mop up cash at very low rates. The last one I subscribed with them was even 11%. It was later they pitied themselves and adjusted it to 12%.

However, with the platora of companies seeking funds with rates ranging from 15% and above, who go look them except Pension funds and the likes.

I think the rating has to do with the financial capacity and stability of the company. I'm looking for a way to build confidence in most of these ones with higher rates. I think the risk is higher

amordi:

I think the rating has to do with the financial capacity and stability of the company. I'm looking for a way to build confidence in most of these ones with higher rates. I think the risk is higher

You can speak with the agents of the arrangers on your areas of doubt. If the mail was sent to you directly, you will see their annual reports. The ratings, firms that rated them that way and explanation why. You also Google the companies to see their track records.

Some of those CP are now between their series 10 - 15. How have the fared so far. Have they been able to keep up with their obligations..? Contacting the arrangers will let you know what they (arranger) have put inplace to ensure the CPs doesn't fail in their obligations.

At the end, it's all risk taking. That's why due diligence is essential. I only subscribed to that of MTN some months back because it was the only CP available then if not the rates was too poor even when compared with the TB rates that came out a week after.

I am just getting to know about this. Can the house help scrutinize. Also what are the applicable taxes talked about.

ernie4life:


This is a bond not a commercial paper

How do I purchase one of these financial instruments?

Dangote Cement plc