Nigeria’s Eurobonds Yield Dips as Demand for New Notes Surges
In Nigeria’s sovereign Eurobonds market, buy pressure across the short, mid, and long segments of the yield curve resulted in a 0.15% decrease in the average yield, bringing it to 9.55%, traders said.
The Eurobond segment witnessed active trading, characterized by bullish bias as market participants submitted bids across the curve. The new Eurobonds notes launched this week were top on the list of assets receiving strong demand from offshore investors that lost their bids at the auction.
The Nigerian government raised $2.2 billion from the international debt capital market. Investors staked $9.9 billion, but the Debt Management Office was only permitted to raise at most $2.2 billion that was approved by the Nigerian legislator for budget deficit finance.
10-year notes were issued at 10.375%, according to the Nigerian authorities, and the attractiveness of the rates caused oversubscription at the main auction conducted.
Investment firms reported that most buying was focused on the new 6.5 and 10-year Nigerian Eurobonds. This positive sentiment extended to other sovereign bonds as well, according to TrustBanc Financial Group.
Separate investment banking firms noted that market optimism was strengthened by dovish remarks from Federal Reserve Governor Christopher Waller, who is in support of an additional 25 basis points US Fed rate cut in December.
Demand was observed on the newly issued bonds, with secondary market yield easing to 9.49% for the Jun-31 maturity and 10.21% for the Dec-34 maturity, analysts at AIICO Capital Limited said in a note.
Portfolio managers were also active across the curve in Ghana, Egypt, and Angola. Analysts expect Fed Chair Joseph Powell’s speech to influence market sentiment in the near term. #Nigeria’s Eurobonds Yield Dips as Demand for New Notes Surges FBN Holdings Sheds 8% as Investors Exit Positions
