OTC FGN Bond Yields Rise Sharply for the 10-year Bond to 14.05% from 10.60%…

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In the just concluded week, values of FGN bonds traded at the over-the-counter (OTC) segment depreciated further for all maturities tracked
amid sustained bearish activity: the 5-year, 14.50% FGN JUL 2021 paper, the 7-year, 13.53% FGN MAR 2025 note, the 10-year, 16.29% FGN MAR 2027 debt, and the 20-year, 16.25% FGN APR 2037 bond lost N1.87, N4.52, N17.92 and N15.03 respectively even as their corresponding yields rose sharply to 7.35% (from 6.08%), 11.34% (from 10.23%), 14.05% (from 10.60%) and 12.18% (from 10.62%) respectively.

Elsewhere, the value of FGN Eurobonds traded at the international capital market depreciated for all maturities tracked amid sell pressure.

The 10-year, 6.75% JAN 28, 2021 bond, 20-year, 7.69% FEB 23, 2038 paper and 30-year, 7.62% NOV 28, 2047 debt shed USD6.31, USD22.93 and USD20.09 while their corresponding yields rose to 11.46% (from 3.85%), 11.23% (from 8.13%) and 10.75% (from 8.28%).

In the new week, we expect OTC bond prices to depreciate (and yields to rise) as the fear of local currency devaluation at the official window becomes pronounced amid Naira deprciation at the I&E Window.

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