FGN Bond Stop Rates Fall for Most Maturities amid Demand Pressure…

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In the just concluded week, DMO sold FGN
bonds worth N116.65 billion at the primary
market auction, viz: 10-year, 12.50% FGN APR 2026 worth N25.42 billion, 15-year, 12.50% FGN MAR 2035 paper worth N21.45 billon, 25- year, 9.80% FGN JUL 2045 bond worth N16.09 billion and 30-year, 12.98% FGN MAR 2050 debt worth N53.69 billion.

Given the high demand, stop rates for most maturities fell: stop rate for 15-year, 25-year and 30-year bonds fell to 9.75% (from 9.80%), 9.35% (from 9.50%)
and 9.90% (from 9.95%) respectively.

However, stop rate for 10-year paper rose to 6.70% (from 6.00%).

Also, the values of FGN bonds traded at the over-the-counter (OTC) segment appreciated for most maturities tracked.

Specifically, the 5-year, 14.50% FGN JUL 2021 bond, the 7-year, 13.53% FGN MAR 2025 note and the 10-year, 16.29% FGN MAR 2027 debt gained N0.09, N0.34 and N0.10 respectively; their corresponding yields fell to 2.85% (from 3.17%), 6.35% (from 6.44%) and 7.79% (from 7.82%) respectively.

However, the 20-year, 16.25% FGN APR 2037 debt lost N4.30 while its corresponding yield rose to 9.80% (from 9.43%). Meanwhile, the value of FGN Eurobonds traded at the international capital market fell for all maturities tracked.

The 10-year, 6.75% JAN 28, 2021 bond, the 20-year, 7.69% FEB 23, 2038 paper and the 30-year, 7.62% NOV 28, 2047 debt lost USD0.44, USD2.41 and USD2.50 respectively; while their corresponding yields jumped to 4.52% (from 3.63%), 8.12% (from 7.85%) and 8.20% (from 7.96%) respectively.

In the new week, we expect the value of FGN Eurobonds prices to appreciate (and yields to moderate) amid increased flight to safety by institutional investors owing to fear of currency devaluation.

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