FGN Bond Yields Rise for Most Maturities Tracked in Tandem With Stop Rates…


In the just concluded week, the Debt Management Office allotted N170.36 billion worth of bonds across 16.29% FGN MAR 2027, 12.50% FGN MAR 2035 and 9.80% FGN JUL 2045 with marginal rates expanding by 7.98%, 8.74%( from 6.95%) and 8.95%( from 7.0%) respectively.

Given the higher stop rates, the values of FGN bonds traded at the secondary marketfurther moderated as yields increased for most maturities tracked, especially at the longer end of the curve.

Notably, the 5-year, 14.50% FGN JUL 2021 bond, the 10-year, 16.29% FGN MAR 2027 and the 20-year, 16.25% FGN MAR 2037 note lost N0.25, N1.95 and N0.95 respectively; their corresponding yields rose to 0.51% (from 0.50%), 8.06% (from 7.75%) and 8.76% (from 8.69%) respectively. However, the the 7-year, 13.53% FGN APR 2025 paper gained N0.71, its yield fell to 5.35% (from 5.54%).

Meanwhile, the value ofFGN Eurobonds traded at the international capital market appreciated for most maturities tracked. The 20-year, 7.69% FEB 23, 2038 paper and the 30-year, 7.62% NOV 28, 2047 debt gained USD0.28 and USD0.31 respectively, while their corresponding yields fellto 7.12% (from 7.14%) and 7.24% (from 7.27%) respectively.

However, the 10-year, 6.75% JAN 28, 2021 bond lost USD0.02; while its corresponding yield rose to 31.66% (from 11.92%) as the bond matures in the new week.

In the new week, we expect local OTC bond prices to appreciate (and yields to moderate) amid expected boost in financial system liquidity.