Nigeria's Eurobond Yield Crossed 10% on Fresh Selloffs

The Nigerian Eurobond yield crossed 10% in the international market for trading existing sovereign US dollar denominated fixed interest securities assets. The surge in US Nigeria’s US dollar benchmark yield was driven by foreign investors’ sentiment amidst unimpressive macroeconomic data. 

The recent trading pattern shows that the foreign market is calling for rate repricing over an unimpressive sovereign risk profile ahead of the Eurobonds issuance plan. Nigeria is expected to be in the Eurobond market to raise funds from US dollar bond sales.

MarketForces Africa gathered from Broadstreet that a recent spot rate hike on one-year Treasury bills sold by the Central Bank of Nigeria would underscore the country’s US dollar bond pricing. Foreign investors are probably expecting more from the authority after it sold 364-day bills for more than 21%.

However, the Debt Management Office, which oversees the country’s borrowing process, signaled that it has not obtained necessary approval amidst news that the authority has named Chapel Hill Denham, a company owned by finance minister Wale Edun, as an adviser for the issuance.

US government benchmark bond yields moved slowly early Tuesday ahead of the Federal Reserve’s policy decision.  The US yield on the 2-year Treasury dipped less than 1 basis point to 4.740%. Yields move in the opposite direction to prices.

The yield on the 10-year US Treasury fell less than 1 basis point to 4.329%. The yield on the 30-year Treasury rose less than 1 basis point to 4.452%. Benchmark government bond yields were little changed early Tuesday ahead of the Federal Reserve’s policy decision.

In the bond market, trading activity was on a cautious thread, thus the average yield closed flat at 18.40%. In the sovereign Eurobonds market, there was negative trading activity resulting in a 0.10% increase in the average yield to 10.17%, Cowry Asset Management Limited told investors in an update. #Nigeria’s Eurobond Yield Crossed 10% on Fresh Selloffs

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