Nigeria Eurobonds Yields Ease as Offshore Investors Buy Dollar Debt
Nigeria Eurobonds yields eased in international markets as offshore investors piled into positions ahead of inflation data and moderating global crude oil prices.
The average yield fell 4bps to 7.03%, supported by improved offshore investor confidence and renewed demand for Nigeria’s sovereign dollar-denominated debt securities, according to Cowry Asset Limited.
Market demand for the sovereign US dollar note was bolstered by sustained optimism about Nigeria’s reforms and an oil-driven boost to fiscal performance ahead of fresh, large external borrowing.
Despite sell pressure in African Eurobonds, pockets of demand for Nigeria US dollar bonds emerged last week, and bargain hunting continued into Monday.
Traders reported that the strongest buying interest was concentrated in the short-to-mid end of the curve, led by the FGN Euro 3 and FGN Euro 7 tenors, which both tightened by -24bps (to 5.96% and 7.23%, respectively).
Moderate yield contractions were also recorded across the FGN Euro 5 (-21bps to 6.83%), FGN Euro 10 (-19bps to 7.65%), and ultra-long FGN Euro 20 (-14bps to 8.34%) papers
The average benchmark yields contracted 16bps last week, with the most pronounced decline on the Mar-2029 note (-19bps) and the Feb-2032 note (-19bps).
Investment analysts expect Nigerian Eurobonds to sustain a positive bias, supported by elevated crude oil prices and the Fed’s rate pause, which could sustain interest in emerging-market assets. However, persistent inflationary pressures and elevated global yields could temper further gains.
