Nigerian Eurobonds Yield Falls as Nov. 2025 Due for Redemption
Nigerian Eurobond yields fell at the international debt market as foreign portfolio investors increased their portfolio holdings amidst the near redemption of sovereign external borrowing notes.
The Debt Office raised $2.85 billion from the external market to support Nigeria’s 2025 budget deficit, and some analysts said the action was initiated as part of an effort to redeem a borrowing note that will expire in November.
The rally suggests the market has priced in near-zero default risk as the country’s reforms begin to yield results with about $47 billion in gross external reserves, as per the Central Bank’s recent disclosure.
Amidst uncertainties surrounding the US Federal Reserve rate cut, oil-linked African issuers experienced broad-based demand for borrowing papers on Thursday.
The market reacted to a spike in US unemployment data, signalling a potential December interest rate cut in the United States, in contrast to the Fed’s initial signals.
US Fed Outlook Uncertain
The Federal Reserve on Wednesday released the minutes of the Federal Open Market Committee meeting that was held on October 28–29, 2025.
Consistent with the Committee’s decision to lower the target range for the federal funds rate to 3¾ to 4 percent, the Board of Governors of the Federal Reserve System voted unanimously to lower the interest rate paid on reserve balances to 3.90 percent, effective October 30, 2025.
The Board of Governors of the Federal Reserve System voted unanimously to approve a ¼ percentage point decrease in the primary credit rate to 4.0 percent, effective October 30, 2025.
But Jerome Powell, Fed Chair signalled rate cut may be slowed in December, keeping money market participants on the edge. 10-Years US treasury continue to however around 4%.
African bonds
Nigerian Eurobonds staged a rally, with the average yield falling 6bps. The drop signals reduced perceived risk and growing expectations of fresh capital inflows.
With the $1.18 billion November 2025 Eurobond redemption approaching later this week, investors are actively building positions in the Nov-2025 instrument ahead of the payout, Cowry Asset Limited told investors in a report.
The African Eurobond market traded on a bullish note as investors reacted to the higher U.S. unemployment rate of 4.4% in October, up from 4.3% in September, which signalled the possibility of a Fed rate cut in December despite rising inflation.
The market experienced broad-based buying interest across major African sovereigns, including Nigeria, Ghana, Angola, and Egypt. Nigerian papers, in particular, attracted positive interest across the curve, leading to a 6bps decline in the average yield on Nigerian Eurobonds to 7.63%, AIICO Capital Limited said. Nigerian Treasury Bills Yield Drops to 16.89% after Auction
