Nigeria’s Eurobonds Yield Sinks to 9% as Demand Heats Up
The average yield sank significantly as foreign portfolio investors (FPIs) rushed Nigeria’s Eurobonds after the country made a new visit to international capital market.
The increased demand for Nigeria’s notes in the secondary market was spurred by an unmet demand from the Eurobond sale last week.
New sovereign Eurobonds worth $2.2 billion was priced by the Nigerian government as part of efforts to raise funds to support the country’s huge budget deficit.
Nigeria’s Eurobond was significantly oversubscribed to the tune of $9 billion versus $2.2 billion allotment. Nigerian government issued 6.5- and 10-year Eurobonds to offshore investors at 9.625% and 10.375% yields, according to Debt Management Office.
FPIs were active across the sovereign Eurobonds curve, picking up maturities at attractive levels, with major focus at the mid to long ends of the curve.
The strong buy pressure across the short, mid, and long segments of the yield curve led to a 0.08% decrease in the average yield, which now stands at 9.18%, investment firm Cowry Asset Limited said in a note.
Fixed income market analysts noted that the Eurobond market initially exhibited mixed sentiments but traded on a bullish note for most of the week.
Due to expectations, elevated yields, there were noticeable interest in Sub-Saharan African (SSA) and North African papers.
In the SSA Sovereign Eurobond space, buy interest prevailed as average yields fell 2.1ppt to settle at 6.4%, Afrinvest Limited told investors in a note.
Analysts said this positive performance was predominantly driven by strong buying interest on Nigeria’s freshly issued papers – NIGERIA 2033 and 2031 instruments, with yield decline of 67bps and 62bps, respectively. #Nigeria’s Eurobonds Yield Sinks to 9% as Demand Heats Up#
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