Nigeria’s 20-Year US Dollar Bond Yield Falls to 8.50%
Yields on Nigeria’s sovereign US dollar bonds slipped across the short, belly, and long ends of the curve as foreign portfolio investors and asset managers returned to international markets and piled into oil-linked issuers.
The 20-year US dollar bond yield moderated to 8.50% on Wednesday, driven by sustained interest in the country’s borrowing papers in the international capital market.
A slew of fixed-income market analysts reported that the Nigerian Eurobond market was generally stronger, with yields falling on most bonds, including some African issuers.
Trading in the African Eurobonds segment mirrored the bullish sentiment that pushed yields on top issuers lower as the Fed kept rates unchanged. The average yield on Nigerian Eurobonds declined by 8 basis points (bps) to 7.35%, according to Cowry Asset Management Limited.
Analysts said improved offshore investor confidence and heightened demand for Nigeria’s sovereign dollar-denominated debt securities underpinned the move.
The Nigeria Eurobond with a 3-year maturity fell 6 bps to 6.32%, AIICO Capital Limited said in its market update, while the 7-year US dollar papers fell 5 bps to 7.61%.
Yields on the 10-year sovereign US dollar bond fell 2bps to 7.93% on buying momentum. Traders also reported bargain hunting in the 20-year Eurobond, pushing its yield down 4bps to 8.50%.
The 5-year rose 3bps to 7.14%, AIICO Capital said in its report, adding that yields may stay near current levels. Oil near $114 keeps inflation worries alive, which may limit further yield falls. Investors will watch the Fed’s message on rates. Nigeria’s US Dollar Bonds Dumped as 10-Year Yield Surges to 8%
