Nigeria Eurobond Yield Jumps on Risk Facing Oil-linked Issuers
The average yield on Nigerian Eurobond inched higher by 19 basis points to 9.98% in the international capital market as sell pressure was seen across African sovereign papers, reversing the previous day’s trend.
Some investment firm said the riskoff pressures was driven by a possible monetary tightening easing, as the Nigerian government could hold down rate hikes with the potential to drag the yield curve low and reduce real return on investment.
But the selloff trend wasn’t particular to Nigerian sovereign Eurobonds but rather a reflection of offshore investors’ and market perception of oil-linked economies that are facing uncertainties in the global commodities market – with persistent price fluctuations.
Nigeria and Angola – among other issuers—depend heavily on inflows from oil exports. And the price of crude oil has become relatively unstable with a lower probability on demand growth outlook in addition to US President Donald Trump’s stance on energy costs.
The latest report indicates that the US administration favour oil prices between the range of $40-50 per barrel, supported by global demand projection with an effort to bring Iranian exports into the fold.
Foreign portfolio investors’ (FPIs’) sell-offs significantly impacted Nigeria’s sovereign Eurobond market, fuelling bearish sentiment across the long, mid, and short segments of the curve, Cowry Asset Management Limited told investors in a note.
“This effect was particularly pronounced for the Nov-2025 and Sep-2028 Eurobonds, which played a key role in driving yields down across the market”, the investment firm said.
Consequently, the average yield increased by 0.16%, settling at 9.98% due to the decision to trim Nigeria sovereign papers. African Eurobonds extended their decline today, pressured by falling crude prices as the potential revival of the US-Iran nuclear deal raised prospects of increased global oil supply.
Oil-linked issuers like Nigeria and Angola underperformed, with Nigeria’s sovereign curve weakening to an average yield of about 10%. However, late-session bargain hunting in select discounted papers helped moderate the selloff before market close, AIICO Capital Limited highlighted in an investor note. #Nigeria’s Eurobond Yield Rises as Oil-Linked Issuers Face Risks
