Nigeria’s Eurobonds Yield Slides Below 7% after Rates Hold

Nigeria’s Eurobonds Yield Slides Below 7% after Rates Hold

Nigerian Eurobonds rallied in international markets as investor sentiment improved after midweek sell-offs in US dollar-denominated sovereign notes.

The average yield on the sovereign notes retreated 2bps to 6.98%, signalling cautious yet improving global investor interest and a broadly favourable outlook toward Nigeria’s dollar-denominated sovereign obligations.

Foreign portfolio investors sold off their holdings in the sovereign asset after the statistics office released April inflation data, with the consumer price index approaching 16%, closely tied to local bond yields.

However, the monetary policy committee maintained the status quo, keeping key benchmark interest rates and other parameters in place to anchor inflation.

Nigeria’s decision to maintain its monetary policy tightening boosted foreign investor sentiment and triggered bargain hunting in sovereign papers among top African issuers.

Traders said yields eased slightly across most maturities despite persistent tensions in the Middle East and volatility in global rates and oil prices.

At the front end, yields on the Nigerian Eurobonds with NOV 2027, MAR 2029, and FEB 2030  maturities climbed by 1bp, 4bps, and 4bps, respectively, reflecting mild profit-taking.

However, sentiment improved across the belly and long end, as the JAN 2031, FEB 2032, and SEP 2033 papers declined by up to 4bps, while the JAN 2046, JAN 2049, and SEP 2051 maturities eased marginally.

In the local debt market, Nigerian bonds closed flat, with average yields holding steady at 16.21%, reflecting measured domestic investor confidence and a cautious appetite for naira-denominated sovereign debt. NOFR Steadies at 22% Amidst Financial System Liquidity Swings