omo ten years loud oh

just2endowed:
omo ten years loud oh

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Please who has the result of today's primary market. Please update us.

sammily:
Hello guys, I got this ad from my stockbroker about the Lagos State Gov Bond. What do you think about it. Is this LASG bond credible like the FGN bond


Stanbic IBTC Capital Limited is pleased to inform you of that the Lagos State Government’s (“Lagos State’s”, ‘’LASG’s’’ or “the State’s”) Series I up to ₦100 Billion Bond Issuance (‘Series I Issuance” or “Series I Bond”), under LASG’s ₦1 Trillion Debt and Hybrid Instruments Issuance Programme (“DAHI Programme”) is NOW OPEN. The Offer is scheduled to close on Friday, May 12, 2023.

Is my eyes paining me or am I seeing a 24-months moratorium?

Apitch:


Is my eyes paining me or am I seeing a 24-months moratorium?

Could you please shed more light on this clause. What exactly does it implies?

Kindly find below yesterday's NTB auction results.

Na wa ooo!! Following the NTB trend lately is now a roller coaster and becoming misleading. I was not even greedy but simply bidded as per the old rate and I had hoped the coming rates would be a parting gift. Mischew!!

DigitalMallam:

Could you please shed more light on this clause. What exactly does it implies?

As seen online.... A moratorium is a pause on payments for a certain period of time. The reason is typically financial hardship and the period of the moratorium is agreed upon with the lender. Knowing the difference between grace periods and moratoriums, and utilizing them appropriately can help with financial planning strategies.

Foodempire:


As seen online.... A moratorium is a pause on payments for a certain period of time. The reason is typically financial hardship and the period of the moratorium is agreed upon with the lender. Knowing the difference between grace periods and moratoriums, and utilizing them appropriately can help with financial planning strategies.

From a colleague "..after 2yrs of purchase, one will be getting part-principal repayment on the bond. Hence the value of the coupon reduces over time "

DigitalMallam:

From a colleague "..after 2yrs of purchase, one will be getting part-principal repayment on the bond. Hence the value of the coupon reduces over time "

Moratorium simply means a period of grace before payment(interest or repayment) begins.
in this case, if I'm not getting it wrong, you would not receive any payment after 2 years of investment before the interest starts coming in and then the bulk capital(principal) at the end of the tenure(10yrs)

Correct plus the interest for the first 2 years is rolled over (added to that of) the remaining 8 years.

Apitch:


Moratorium simply means a period of grace before payment(interest or repayment) begins.
in this case, if I'm not getting it wrong, you would not receive any payment after 2 years of investment before the interest starts coming in and then the bulk capital(principal) at the end of the tenure(10yrs)

To the mothers and mothers to be in the house
HAPPY MOTHERS DAY!
You will enjoy being a mother even at your old age.

Issuing houses :
Cardinal Stone & Lagos state Government

Nice

Good evening fellow investors,

Please I would like to be taught, like a high school student, what these figures, percentages and names mean in practical terms.

Maybe I have been misinterpreting them. I have read the literal meanings online but I want practical examples as regards our local market. For instance, there is a huge disparity in figures between the 2024 and 2025 bonds here in terms of ASK PRICE and YIELD TO MATURITY.

Ignore the 2024. It is not being offered by your bank or broker because there is no FGN bond that sells for N1. The others (2025 & 2026) are available for purchase from your bank or broker.

IYGEAL:
Good evening fellow investors,

Please I would like to be taught, like a high school student, what these figures, percentages and names mean in practical terms.

Maybe I have been misinterpreting them. I have read the literal meanings online but I want practical examples as regards our local market. For instance, there is a huge disparity in figures between the 2024 and 2025 bonds here in terms of ASK PRICE and YIELD TO MATURITY.

skydiver01:
Ignore the 2024. It is not being offered by your bank or broker because there is no FGN bond that sells for N1. The others (2025 & 2026) are available for purchase from your bank or broker.

Thank you.

You're right, the 2024 bond is not on sale as the link for BUY is not highlighted and not clickable.

Still a little confused about YIELD TO MATURITY.

IYGEAL:


Thank you.

You're right, the 2024 bond is not on sale as the link for BUY is not highlighted and not clickable.

Still a little confused about YIELD TO MATURITY.

Before financial experts and statistician come for further clarifications.

Let me try to explain with my little understanding. The coupon /interest rate on the FGN Bond 2025 you posted to be splitted and paid bi-annually is 13.53%. The actual amount for that bond when auctioned was N100. The amount they are asking for it now is N107.240. If you buy it at this rate now, you have paid extra N7.240 for it. Even at that, the coupon/interest rate will not change.

For example, If you are to invest N100,000 you are expected to get N13,530 annually to be splitted and paid N6,765 on the 25 Mar and 25 Oct yearly. Now if you buy it at that asking price, you will pay N107,240 to get the same N13,530 annually.

freeman67:


Before financial experts and statistician come for further clarifications.

Let me try to explain with my little understanding. The coupon /interest rate on the FGN Bond 2025 you posted to be splitted and paid bi-annually is 13.53%. The actual amount for that bond when auctioned was N100. The amount they are asking for it now is N107.240. If you buy it at this rate now, you have paid extra N7.240 for it. Even at that, the coupon/interest rate will not change.

For example, If you are to invest N100,000 you are expected to get N13,530 annually to be splitted and paid N6,765 on the 25 Mar and 25 Oct yearly. Now if you buy it at that asking price, you will pay N107,240 to get the same N13,530 annually.

What of the 'Yield to Maturity'?. What does it mean?.

Hmmmm, who would have believed that I would also start explain the terminologies involved in bonds. This is probably one of the first times I can say I understand it.

So let me try to explain using the 2024 and 2025 bonds from my little understanding.

The maturity dates are fairly obvious.

Before talking about the coupon rate, Ask price and Yield to Maturity, we must start from the primary market as an analogy to TB.
In the primary market, Bonds are sold at a rate of 100.00 naira. So, if you want to invest 100,000.00 naira, the quantity you will be able to get will be 1,000 units.

Your interest on those 1k units will be 14.2% for the FGN Bond that matures on the 14th of March, 2024 and 13.53% for the one that will mature on the 23rd of March, 2025.

i.e, 14.2% of 100k will be 14,200 naira. This will be paid in 2 batches of 7,100 naira per annum until maturity date.

Ditto for the second one. 13.53% of 100k will be 13,5300 naira.This will be paid in 2 batches of 6,765 naira per annum until maturity date.

Now, assume you need money and do not want to wait till maturity, you can now offer to sell your bond at a profit (that is more than 100 naira per unit) or at a loss (less than 100 naira per unit). This is equivalent to buying TB from the secondary market.

So back to this example, these bonds are being offered at 107.240 and 104.490 respectively. That is the seller is asking for these prices. (Ask Price). The sellers are selling at a profit.

If you the new buyer now has 100k also to buy, you will only be able to buy 932.488 quantity of the March 2024 bond and 957.03 of the March 2025 bond. (I arrived at these values by dividing 100k by the respective ask prices)

Now, as far as the issuers in concerned. That new price is between the buyer and the seller. The price of the bonds are still going to be 100 naira in their books.

That means, the value of your bond with the issuer will be 93,488.00 naira and 95,703.00 respectively.
That means it is those respective values that the coupon rates will be applied to determine what you will be paid bi-annually.

So, the yield rate is a way of telling you what the actual interest based on the Ask Price that you are paying for the bond will be. Simply put, while the person that bought at 100 per bond unit will be enjoying an interest rate that is equal to the coupon rate, you that bought at a new Ask Price will be enjoying an interest rate that is equal to the yield rate. Note, that the yield rate is not always lower than the coupon rate.

Here 10% interest or yield rate is still fair to me.

Please note, I am not a financial expert and this explanation is based on my own small understanding of the subject that was initially very confusing to me at some stage in my life. I will also accept any correction from a more knowledgeable person in good faith.

IYGEAL:
Good evening fellow investors,

Please I would like to be taught, like a high school student, what these figures, percentages and names mean in practical terms.

Maybe I have been misinterpreting them. I have read the literal meanings online but I want practical examples as regards our local market. For instance, there is a huge disparity in figures between the 2024 and 2025 bonds here in terms of ASK PRICE and YIELD TO MATURITY.

freeman67:


Before financial experts and statistician come for further clarifications.

Let me try to explain with my little understanding. The coupon /interest rate on the FGN Bond 2025 you posted to be splitted and paid bi-annually is 13.53%. The actual amount for that bond when auctioned was N100. The amount they are asking for it now is N107.240. If you buy it at this rate now, you have paid extra N7.240 for it. Even at that, the coupon/interest rate will not change.

For example, If you are to invest N100,000 you are expected to get N13,530 annually to be splitted and paid N6,765 on the 25 Mar and 25 Oct yearly. Now if you buy it at that asking price, you will pay N107,240 to get the same N13,530 annually.

Thank you.

I understand the COUPON RATE as simply the interest rate, which is always annualized.

IYGEAL:


Thank you.

I understand the COUPON RATE as simply the interest rate, which is always annualized.

Yield to maturity is the total rate of return that will have been earned by a bond when it makes all interest payments and repays the original principal.
YTM is essentially a bond's internal rate of return if held to maturity.

ojesymsym:
Hmmmm, who would have believed that I would also start explain the terminologies involved in bonds. This is probably one of the first times I can say I understand it.

So let me try to explain using the 2024 and 2025 bonds from my little understanding.

The maturity dates are fairly obvious.

Before talking about the coupon rate, Ask price and Yield to Maturity, we must start from the primary market as an analogy to TB.
In the primary market, Bonds are sold at a rate of 100.00 naira. So, if you want to invest 100,000.00 naira, the quantity you will be able to get will be 1,000 units.

Your interest on those 1k units will be 14.2% for the FGN Bond that matures on the 14th of March, 2024 and 13.53% for the one that will mature on the 23rd of March, 2025.

i.e, 14.2% of 100k will be 14,200 naira. This will be paid in 2 batches of 7,100 naira per annum until maturity date.

Ditto for the second one. 13.53% of 100k will be 13,5300 naira.This will be paid in 2 batches of 6,765 naira per annum until maturity date.

Now, assume you need money and do not want to wait till maturity, you can now offer to sell your bond at a profit (that is more than 100 naira per unit) or at a loss (less than 100 naira per unit). This is equivalent to buying TB from the secondary market.

So back to this example, these bonds are being offered at 107.240 and 104.490 respectively. That is the seller is asking for these prices. (Ask Price). The sellers are selling at a profit.

If you the new buyer now has 100k also to buy, you will only be able to buy 932.488 quantity of the March 2024 bond and 957.03 of the March 2025 bond. (I arrived at these values by dividing 100k by the respective ask prices)

Now, as far as the issuers in concerned. That new price is between the buyer and the seller. The price of the bonds are still going to be 100 naira in their books.

That means, the value of your bond with the issuer will be 93,488.00 naira and 95,703.00 respectively.
That means it is those respective values that the coupon rates will be applied to determine what you will be paid bi-annually.

So, the yield rate is a way of telling you what the actual interest based on the Ask Price that you are paying for the bond will be. Simply put, while the person that bought at 100 per bond unit will be enjoying an interest rate that is equal to the coupon rate, you that bought at a new Ask Price will be enjoying an interest rate that is equal to the yield rate. Note, that the yield rate is not always lower than the coupon rate.

Here 10% interest or yield rate is still fair to me.

Please note, I am not a financial expert and this explanation is based on my own small understanding of the subject that was initially very confusing to me at some stage in my life. I will also accept any correction from a more knowledgeable person in good faith.

Many thanks for this elaborate explanation.

May I ask if you have seen this play out practically (during your course of investment)?
It is clearer from your explanation now.

freeman67:


Yield to maturity is the total rate of return that will have been earned by a bond when it makes all interest payments and repays the original principal.
YTM is essentially a bond's internal rate of return if held to maturity.

Yea, that's what I was seeing online too.
I no come too understand am

Never bought at the secondary market.
Mine has always been at the primary market

IYGEAL:


Many thanks for this elaborate explanation.

May I ask if you have seen this play out practically (during your course of investment)?
It is clearer from your explanation now.

ojesymsym:
Never bought at the secondary market.
Mine has always been at the primary market

Alright. Thank you.

Look at it or think about it in this way. The yield to maturity is the equivalent coupon rate of a bond at the bond's current price (purchase or sale). Remembering that the coupon rate was set when the bond was originally issued @N100 per unit. Primary markets allow for new bond issuances as well as bond re-openings. Nevertheless, the higher the bond price the lower the yield to maturity and vice versa.

IYGEAL:


Yea, that's what I was seeing online too.
I no come too understand am

Kindly find below NTB auction results for 24 May 2023.

skydiver01:
Look at it or think about it in this way. The yield to maturity is the equivalent coupon rate of a bond at the bond's current price (purchase or sale). Remembering that the coupon rate was set when the bond was originally issued @N100 per unit. Primary markets allow for new bond issuances as well as bond re-openings. Nevertheless, the higher the bond price the lower the yield to maturity and vice versa.

Thank you.

With the current price of fuel, rates should go up to at least 17%. How can we cushion the effect of subsidy removal with the meagre interest we receive on investments? I bought 5k worth of fuel today and kept checking my dashboard to see the gauge, eventually I switched off the AC, I say to my self I need to work harder so as to earn more, it's well.