Lets discuss the January FGN bond auction,
See results below….
“N40.00 billion of FGN bonds was newly issued at marginal rates of 12.24% and 12.50% against 10.95% and 11.00% for 5 year and 10 year respectively at the previous auction. Total subscription stood at N149.43 billion, 187% of amount offered”
It means that for a 5-year loan, you will pay your bank and interest rate NOT LESS than 12.24%, because the 12.24% is the rate given to the best borrower. What does this mean for you the investor?
Well let me give you the minimum rates you should accept from any other person asking you to invest money for similar duration, (of course other than the FGN)
For 3 months’ investment only accept an interest rate above 4.29%
For 6 months’ investment only accept an interest rate above 7.59%
For one-year investment only accept an interest rate above 9.33%
For 5-year investment only accept an interest rate above 12.24%
For 10-year investment only accept an interest rate above 12.50 %
(Photo Credit: Financial Watch)
