​​​BONDS

asemonweb2.png ​
Bonds are fixed income instruments issued by entities to raise funds. The issuer of a bond presents the bond as a promise to make available regular, fixed, income payments to the investor or the buyer of the bond who is also the bondholder. These in​come payments are known as coupons and bonds which pay coupons twice a year are known as semi-annual coupon bonds. There are also bonds that make coupon payments annually, known as annual coupon bonds. Bonds which make no coupon payments are called zero coupon bonds, or deep discount bonds. In making a decision to buy a bond, investors should consider a number of factors such as the tenure of the bond, the coupon payments expressed as a single percentage rate, and the yield-to-maturity or just simply, yield. 

The Nigerian Stock Exchange (NSE) hosts and lists different fixed income instruments on its platform which include:
  • Federal Government Bonds - are the most liquid and capitalized bonds on the NSE. The Federal Government (FGN)​ issues bonds in the primary market through the Debt Management Office (DMO) at its monthly auctions and these bonds are subsequently listed on the Exchange for trading. These bonds are backed by the full faith and credit of the Federal Government of Nigeria and are semi-annual, coupon-paying bonds. Income earned on FGN Bonds is tax-free.​
  • FGN Savings Bonds - are a new initiative launched by the DMO in partnership with the NSE to give retail investors an opportunity to contribute to the growth and development of the nation. The FGN Savings Bonds are currently issued for 2-yr and 3-yr tenures and pay coupons quarterly. They are tax-free and are backed by the full faith and credit of the Federal Government.​​
  • State/Local Government Bonds - are regarded as Sub-National Bonds and are issued by State or Local Governments usually to raise capital to fund projects in the state or municipality. Like FGN Bonds, these bonds are semi-annual coupon paying bonds and are backed by the State or Local Government issuing the bonds.​
  • Supranational Bonds - are issued by supranational entities which are formed when two or more sovereign nations with aligned interests unite to pursue a common agenda most often to promote economic development in developing or member economies. These entities often transcend geographical boundaries, and have access to deeper pools of capital than would be available in the domestic market. They may issue bonds in the local currency of the domestic economy or may issue Eurobonds which are essentially bonds issued outside a country whose currency the bond is stated in. Supranational institutions sell their bonds on local markets of member countries and in the Eurobond market.​
  • Corporate Bonds - ​are issued by private and/or public companies. They usually have higher interest rates or yields than Government Bonds and are backed by the corporate entity issuing the bond.
  • Eurobonds - ​are essentially bonds that are issued outside of a country in which the currency of that bond is denominated. In modern times, Eurobonds have become synonymous with bonds issued in the international market and denominated in USD. Sovereigns, Corporates, and Supranational institutions may choose to issue Eurobonds to diversify their funding mix.

You can now buy and sell bonds through your stockbroker just like shares​. 

Directory of NSE dealing members
View ​now​
Bonds Trading Statistics​
View​ now​
​​​

 Bonds Overview​ | FAQs on Retail Bonds​ |​ The NSE Retail Bond Market Structure | Fixed Income Market Making