FGN Bond Rates Rise for All Maturities Tracked on Sustained Bearish Activity…

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In the just concluded week, the value of FGN bonds traded at the over-the-counter (OTC) segment plunged for most maturities tracked amid renewed bearish activity.

Particularly, the 5-year, 14.50% FGN JUL 2021 paper, the 10-year, 16.29% FGN MAR 2027 debt and the 20-year, 16.25% FGN APR 2037 instrument lost N1.58, N0.21 and N0.82 respectively; their corresponding yields rose to 14.16% (from 13.21%), 14.12% (from 14.08%) and 14.46% (from 14.35%) respectively.

However, the 7-year, 13.53% FGN MAR 2025 bond was flattish and its corresponding yield unchanged at 14.04%.

Elsewhere, the value of the FGN Eurobonds traded at the international capital market decreased for all maturities tracked amid renewed bearish activity – the 10-year, 6.75% JAN 28, 2021, the 20-year, 7.69% FEB 23, 2038 and the 30-year, 7.62% NOV 28, 2047 bonds lost USD0.47, USD2.49 and USD3.37 respectively; their corresponding yields rose to 4.37% (from 4.11%), 7.83% (from 7.53%) and 8.13% (from 7.73%) respectively.

In the new week, Debt Management Office will issue bonds worth N145.00 billion, viz: 12.75% FGN APR 2023 (5-Yr Re-opening) worth N40 billion, FGN APR 2029 (10-Yr Re-opening) worth N50 billion and FGN APR 2049 (30-Yr Re-opening) worth N55 billion respectively.

We expect the bonds to be issued at higher stop rates as investors’ demand for positive real returns on fixed income assets intensify amid declining crude oil prices.

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