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  #1 (permalink)  
Old 14th January 2009, 05:28 PM
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Default Lagos State Fixed rate Bond
Good people,

I am new to Bonds and wish to quickly ask how it works. For instance lagos state Bond guarantees 13% on it's fixed-rate bond.

This suggests that i will get 13k per 100k inestments on the bond. And if the market value of the bond varies within period in question. What do i get?
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Old 16th January 2009, 07:50 PM
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Default Re: Lagos State Fixed rate Bond
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Originally Posted by donchisel View Post
Good people,

I am new to Bonds and wish to quickly ask how it works. For instance lagos state Bond guarantees 13% on it's fixed-rate bond.

This suggests that i will get 13k per 100k inestments on the bond. And if the market value of the bond varies within period in question. What do i get?
I am looking for the prospectus and yet to find it. The 13% is guaranteed and it does not matter what the price of the bonds become. The rate is based on the par value. So for your N100K you will get N13K annually even if the price of the bonds fall to N10K. At the end of the life cycle of the bond you get your N100K back plus N13K.
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Old 16th January 2009, 08:03 PM
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Default Re: Lagos State Fixed rate Bond
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Originally Posted by knightofdelta View Post
I am looking for the prospectus and yet to find it. The 13% is guaranteed and it does not matter what the price of the bonds become. The rate is based on the par value. So for your N100K you will get N13K annually even if the price of the bonds fall to N10K. At the end of the life cycle of the bond you get your N100K back plus N13K.
It is important you hold to maturity if you don't want the price volatility to affect you. The price will fluctuates with the interest rate fluctuations.
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Old 16th January 2009, 09:44 PM
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Default Re: Lagos State Fixed rate Bond
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Originally Posted by Monwowo View Post
It is important you hold to maturity if you don't want the price volatility to affect you. The price will fluctuates with the interest rate fluctuations.
Is there an active secondary market to trade the bonds? I don't think there's one, so you have no choice but to hold to maturity anyway.

Who knows though, there might be an active secondary market before the bonds mature.
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Old 17th January 2009, 03:48 AM
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Default Re: Lagos State Fixed rate Bond
Quote:
Originally Posted by knightofdelta View Post
I am looking for the prospectus and yet to find it. The 13% is guaranteed and it does not matter what the price of the bonds become. The rate is based on the par value. So for your N100K you will get N13K annually even if the price of the bonds fall to N10K. At the end of the life cycle of the bond you get your N100K back plus N13K.
Sorry for not posting these earlier!
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Last edited by Michael; 27th March 2009 at 06:43 PM.
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