Nigerian Eurobond Yield Jumps as Selloffs Hit African Issuers
The average yield on Nigerian sovereign Eurobonds rose by 26 basis points in the international debt capital market as foreign portfolio investors exited positions amid the Middle East conflict, rattling global financial markets.
Broadstreet analysts reported that the average yield on Nigerian sovereign Eurobonds edged higher at the beginning of the week, by 26 basis points, to 7.43%.
This increase indicates a decline in interest and unfavourable sentiment among international investors towards the country’s dollar-denominated sovereign debt.
Oil-linked African issuers faced significant selling pressure in international debt capital markets amid shifting investor sentiment, as crude oil prices retreated following a prior rally.
A slew of fixed-income market analysts told MarketForces Africa the sell-down is a short-term portfolio adjustment to manage risk and returns in the offshore market.
Angolan sovereign Eurobonds were particularly affected, with similar patterns seen in Ghana, Egypt, and other US dollar-denominated notes, driving yields higher.
The 10-year Treasury yield initially climbed but later declined on Monday as oil prices surged above $100 per barrel, then fell after President Donald Trump told a CBS News reporter that the conflict with Iran could soon end.
Consequently, the benchmark 10-year Treasury yield fell by more than 2 basis points to 4.109%, while the yield on the 30-year Treasury bond decreased by more than 3 basis points, settling at 4.721%. The yield on the 2-year Treasury note remained relatively stable at 3.557%.
Crude oil prices fell sharply, with Brent crude down 8.45% to $90 per barrel and US West Texas Intermediate (WTI) down 8.58% to $86.77 per barrel.
This marked the first decrease since the outbreak of the Middle East conflict. This decline followed Monday’s surge when global crude prices exceeded $100 per barrel, the highest level since July 2022, amid concerns about potential supply disruptions.
Analysts attribute this correction to a mix of geopolitical and market factors.
European ministers have discussed releasing strategic oil reserves to help stabilise the market, and remarks from former President Trump seemed to alleviate some investor fears.
Trump had previously warned that “death, fire, and fury will reign upon Iran if Tehran obstructs oil shipments through the Strait of Hormuz.
In response, Iran’s Islamic Revolutionary Guards Corps (IRGC) declared that they would “determine the end of the war” and vowed that no oil would be exported from the region if US and Israeli attacks continued. Oil Prices Ease as Markets Price in Trump Remarks
