emmanuelewumi:



Bonds are secured, LAPO microfinance bank raised N5 billion corporate bond. Bonds are regulated by SEC, can you give an example of a corporate bond that went bad in Nigeria?

There are Trustees to the bonds that makes sure investors interest are protected, they obtain enough collateral securities from the company, they will become signatory to the accounts of the company and directors or nominate directors of the company for the duration of the bond,

Can you give an example of a bank where depositors lost their money and bond holders were secured? Depositors have priority over bond holders. If a bank fails, depositors get paid before bond holders.

The point I am making is that an MFB that bond holders are secure cannot lose its depositors funds. There is no way the bond holders interests in a bank are more protected than depositors’ interests.

If LAPO’s bond holders are secure, then it means its depositors are also secure.

Even the transport company that has the franchise for Ikorodu to TBS raised N6 billion in corporate bond paying 14% per annum and they have been consistent. The Trustees got a legally binding agreement from LASG that the franchise will continue for the duration of the 6 year bond

emmanuelewumi:
Even the transport company that has the franchise for Ikorodu to TBS raised N6 billion in corporate bond paying 14% per annum and they have been consistent. The Trustees got a legally binding agreement from LASG that the franchise will continue for the duration of the 6 year bond

I was talking about MFBs bonds vs deposits o.

Lazyyouth4u:


Can you give an example of a bank where depositors lost their money and bond holders were secured? Depositors have priority over bond holders. If a bank fails, depositors get paid before bond holders.

The point I am making is that an MFB that bond holders are secure cannot lose its depositors funds. There is no way the bond holders interests in a bank are more protected than depositors’ interests.

There are professional advisers to a bond offering, reporting accountant, corporate lawyers, Investment bankers, credit rating agencies, regulatory bodies CBN, NDIC and SEC.

A bank won't go down over night.

Nigeria banks don't raise funds through corporate bonds, equity is the preferred option.

Those who opted for bonds didn't do it in Nigeria, they did Eurobonds on the London Stock Exchange. So it is a very rigorous exercise, maybe just 20% of the banks can raise dollar denominated debt instruments

emmanuelewumi:


99.9% of microfinance banks
in Nigeria can't satisfy the stringent requirements of SEC for bond issuance

I agree completely.

emmanuelewumi:



There are professional advisers to a bond offering, reporting accountant, corporate lawyers, Investment bankers, credit rating agencies, regulatory bodies CBN, NDIC and SEC.

A bank won't go down over night.

Nigeria banks don't raise funds through corporate bonds, equity is the preferred option.

Those who opted for bonds didn't do it in Nigeria, they did Eurobonds on the London Stock Exchange. So it is a very rigorous exercise, maybe just 20% of the banks can raise dollar denomited debt instruments

Boss, Eurobonds do not have preference over depositors funds in a bank o.

Lazyyouth4u:


Can you give an example of a bank where depositors lost their money and bond holders were secured? Depositors have priority over bond holders. If a bank fails, depositors get paid before bond holders.

The point I am making is that an MFB that bond holders are secure cannot lose its depositors funds. There is no way the bond holders interests in a bank are more protected than depositors’ interests.

If LAPO’s bond holders are secure, then it means its depositors are also secure.

If you say before the bank consolidation by Soludo, yes most bond holder get paid before depositors.

emmanuelewumi:
Even the transport company that has the franchise for Ikorodu to TBS raised N6 billion in corporate bond paying 14% per annum and they have been consistent. The Trustees got a legally binding agreement from LASG that the franchise will continue for the duration of the 6 year bond

14%?, what the minimum amount for this CORPORATE bond.

SMJay:
If you say before the bank consolidation by Soludo, yes most bond holder get paid before depositors.

Sorry sir, please what are you talking about?

Lazyyouth4u:


Boss, Eurobonds do not have preference over depositors funds in a bank o.

That is why less than 20% of them will qualify for it

Any bank that can raise Eurobond is a strong bank


Zenith bank has equity of over N1 Trillion or about $2 billion. There financial ratios are also top notch, raising $400 Eurobond should not be a problem.

But a bank like Unity Bank with a negative equity of over N200 billion can't try that. I don't understand why CBN is allowing that bank to continue in business

SMJay:
14%?, what the minimum amount for this CORPORATE bond.

Most corporate bonds will require a minimum of N5 million,

emmanuelewumi:
Even the transport company that has the franchise for Ikorodu to TBS raised N6 billion in corporate bond paying 14% per annum and they have been consistent. The Trustees got a legally binding agreement from LASG that the franchise will continue for the duration of the 6 year bond

Primero Transport is the name of the company

emmanuelewumi:



That is why less than 20% of them will qualify for it

Any bank that can raise Eurobond is a strong bank


Zenith bank has equity of over N1 Trillion or about $2 billion. There financial ratios are also top notch, raising $400 Eurobond should not be a problem.

But a bank like Unity Bank with a negative equity of over N200 billion can't try that. I don't understand why CBN is allowing that bank to continue in business

Unity bank is not a strong bank.

emmanuelewumi:



Most corporate bonds will require a minimum of N5 million,

emmanuelewumi:



Most corporate bonds will require a minimum of N5 million,

emmanuelewumi:



That is why less than 20% of them will qualify for it

Any bank that can raise Eurobond is a strong bank


Zenith bank has equity of over N1 Trillion or about $2 billion. There financial ratios are also top notch, raising $400 Eurobond should not be a problem.

But a bank like Unity Bank with a negative equity of over N200 billion can't try that. I don't understand why CBN is allowing that bank to continue in business

Any MFB that can issue bonds is not a weak MFB. That’s my point

If LAPO is able to issue BBB rated bonds that you say are secure, there is no way your deposits there are not safe.

If LAPO should go under, the bond holders will never receive their money before depositors.

Lazyyouth4u:


Any MFB that can issue bonds is not a weak MFB. That’s my point

If LAPO is able to issue BBB rated bonds that you say are secure, there is no way your deposits there are not safe.

If LAPO should go under, the bond holders will never receive their money before depositors.

I equally wrote that 99.9% of microfinance banks can't satisfy SEC stringent requirements for bond issuance

emmanuelewumi:



There are professional advisers to a bond offering, reporting accountant, corporate lawyers, Investment bankers, credit rating agencies, regulatory bodies CBN, NDIC and SEC.

A bank won't go down over night.

Nigeria banks don't raise funds through corporate bonds, equity is the preferred option.

Those who opted for bonds didn't do it in Nigeria, they did Eurobonds on the London Stock Exchange. So it is a very rigorous exercise, maybe just 20% of the banks can raise dollar denominated debt instruments

My oga, all these you have written have nothing to do with the point I made o.

I said if an MFB’s bonds are secure, why would the deposits not be?

SMJay:
Unity bank is not a strong bank.

It used to be Bank of the North. Northern State governments are the majority shareholders of the bank

emmanuelewumi:



I equally wrote that 99.9% of microfinance banks can't satisfy SEC stringent requirements for bond issuance

Okay. My point was that any MFB that has bonds which you say are very secured cannot have deposits that are also not secure

Lazyyouth4u:


My oga, all these you have written have nothing to do with the point I made o.

I said if an MFB’s bonds are secure, why would the deposits not be?

Do business with the few ones that can successfully raise bonds, which is about 0.5% of the players

Lazyyouth4u:


Can you give an example of a bank where depositors lost their money and bond holders were secured? Depositors have priority over bond holders. If a bank fails, depositors get paid before bond holders.

The point I am making is that an MFB that bond holders are secure cannot lose its depositors funds. There is no way the bond holders interests in a bank are more protected than depositors’ interests.

If LAPO’s bond holders are secure, then it means its depositors are also secure.

Debtors always get paid first

emmanuelewumi:



That is why less than 20% of them will qualify for it

Any bank that can raise Eurobond is a strong bank


Zenith bank has equity of over N1 Trillion or about $2 billion. There financial ratios are also top notch, raising $400 Eurobond should not be a problem.

But a bank like Unity Bank with a negative equity of over N200 billion can't try that. I don't understand why CBN is allowing that bank to continue in business

You know why na. The northern connection

ojesymsym:
Congrats, I hear you have now graduated to Senior Youth.

Anyways, the guys on the US stock thread tend to complain of many juicy stocks not being listed. In any case still help me look those 2 foreign firms if it is convenient for you.

Most of the stocks they are complaining about are penny stocks which are extremely volatile.

afroxyz:


Debtors Creditors always get paid first

I’m guessing you meant creditor . A depositor is a creditor/lender na. When you deposit money in a bank, you are lending the bank your money.

So a bond holder and a depositor are both lenders/creditors of a bank.

Lazyyouth4u:


I’m guessing you meant creditor . A depositor is a creditor/lender na. When you deposit money in a bank, you are lending the bank your money.

So a bond holder and a depositor are both lenders/creditors of a bank.

Bonds are more secured

You have N10 Million in a money market fund and N10 million in a fixed deposit, the fund in the money market fund is more secured

I need a bond that can pay me @ least 15% per annum for the next 9 years..........



Hopefully a bond thread will be opened, I read in a lot of annual report companies paying off bonds and the least coupon they pay is 13%.


That are never advertised

emmanuelewumi:



Bonds are more secured

You have N10 Million in a money market fund and N10 million in a fixed deposit, the fund in the money market fund is more secured

The bolded has got absolutely nothing to do with a bank’s capital structure.

Bonds issued by banks are not more secured than depositors funds. I don’t know where you are getting this from.

Lazyyouth4u:


I’m guessing you meant creditor . A depositor is a creditor/lender na. When you deposit money in a bank, you are lending the bank your money.

So a bond holder and a depositor are both lenders/creditors of a bank.

When a bank closes shop.The bond holders are paid first.They are seen like preference share holders while depositors are paid last after ndic/recovery must have come into the matter.They are more like ordinary share holders.Unlless it has changed

Lazyyouth4u:


The bolded has got absolutely nothing to do with a bank’s capital structure.

Bonds issued by banks are not more secured than depositors funds. I don’t know where you are getting this from.

The cooperate bonds can hardly fail while the bank as a company can fail.The bond failure is a big dent to the image of the country.The worst case is to extend or renegotiate the tenure just like the case in vanuzula.Thst is why bonds are more secured.

Lazyyouth4u:


The bolded has got absolutely nothing to do with a bank’s capital structure.

Bonds issued by banks are not more secured than depositors funds. I don’t know where you are getting this from.

Representative of the issuer of the bond ie Trustee is represented on the board of the company if the debt is substantial to the business capital structure, they also have representatives on the investment, risk management and other important committees of the board.

Who are the representatives of the depositors on the board or important committees of the bank

Biafran4life:
The cooperate bonds can hardly fail while the bank as a company can fail.The bond failure is a big dent to the image of the country.The worst case is to extend or renegotiate the tenure just like the case in vanuzula.Thst is why bonds are more secured.

We have sovereign and corporate bonds.

Sovereign bonds are issued by countries, while commercial papers and corporate bonds are issued by businesses

maishai:
I need a bond that can pay me @ least 15% per annum for the next 9 years..........



Hopefully a bond thread will be opened, I read in a lot of annual report companies paying off bonds and the least coupon they pay is 13%.


That are never advertised

Who is your Stockbroker? They are advertised, especially if you use some of the big Stockbroking firms