₦airaland Forum

Is this thread moderated by anyone?

How are Lazyyouth4u and ahiboilandgas allowed to continue these tedious and frankly nonsensical diatribes?

SMH

Hi everyone,

I am interested in purchasing some units of the "5.625% US$500M JUN 2022 Diaspora bond" listed on the DMO website. Most of stockbroking firms I have contacted so far insisted on $100k entry. Do you guys know any investment house that accept $50k and quite reputable?

Thanks for your response.

P.S. I am not in Nigeria, I don't know if that makes any difference.

Firstly, many thanks for your meticulous explanation. I have come to be an avid fan of your posts on this and the TB thread.

Regarding the calculations below, it is nicely done but I'm having issues understanding where the 80 in the calculation of the total coupon receipts comes from. The only related info relating to 80 is the one below on the previous page by @kolping:

........ However, the DMO displayed a stingy streak as it elected to only allot 80%.

Is this the origin of the 80 in your calculation? Can you please shed more light on that?

Many thanks and best wishes.

awesomeJ:
So case 1:
FGN 16.00 FEB 2021 bond to be purchased in May 2018 at an offer price(dirty) of 950 per unit. What's the yield?

Things we already know:
Face value of an FGN bond, F= 1000.
Coupon payment dates will be in August and February of each year.

Thus, total number of coupon receipts to maturity = 6 ( Aug'18, Feb'19, Aug'19, Feb'20, Aug'20 and Feb'21)
Total coupon receipts = (80.00*6) = 480 (at 16%, coupons'll be 80 every six months)
Total capital gains = F-P (1000-950) = 50.
Term to maturity= 2 years, 9months (May'18-Feb'21) =2.75yrs.

Annualized coupon = 480/2.75=174.55
Annualized price gains= 50/2.75=18.18
I.e
C=174.55
G=18.18
Therefore
yield y= ((174.55+18.18)/950)*100%
y=20.29%