Yield curves of issuers on the Public Securities Market : Orishas-finance

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Yield curves of issuers on the Public Securities Market

13/08/2019

Source : UMOA TITRE

Categories: Index/Markets

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The yield curve indicates the yield offered for the debt securities of an issuer at different maturities. This term structure of yield rates aims to improve transparency in the public securities market, contribute to better price formation during auctions, raise investors' awareness of the relationship between the primary and secondary markets and provide local investors with and international markets a price reference for Treasury bills and bonds issued by Member States.

Investors use the yield curve as a benchmark for the risk/reward pair of different kinds of debt compared to the risk-free rates of return attached to government bonds.

The purpose of the issuer yield curve is:

improve transparency on the MTP;
contribute to better price formation during auctions;
raise investors' awareness of the relationship between the primary and secondary markets;
provide local/international investors with a price reference for securities issued by States.

The yield curve can also be used as an indicator to anticipate changes in interest rates. The most frequently used yield curve is the zero coupon yield curve.

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