Nigeria’s Sovereign Eurobond Yield Dips Below 10%

Due to strong buying interest, Nigeria’s sovereign Eurobond yield has dipped below 10%, according to an investment firm’s report on US dollar bonds trading in the international debt capital market.

For foreign investors, the strength of return on Nigeria’s foreign currency-denominated bonds remains a major attraction amidst continual pendulum swings in US Treasury bonds yield.

In the local market, there was also buying momentum amidst an expectation that Nigerian economic growth would be strengthened as a result of ongoing reforms that cut across all spectrums.

On the downside, the inflation rate has continued to rise unabatedly and the monetary policy has remained behind the door for major shows, especially with an indefinite postponement of its bimonthly meetings.

According to Cowry Asset Limited, there was a positive sentiment across all ends of In Nigeria’s sovereign Eurobonds market yield curve, causing a 15bps decrease in the average yield to 9.98%.

Africa’s largest country by GDP pays more than its peers when it comes to borrowing from the international debt capital market, a financial expert said while chatting with MarketForces Africa.

“The thing is, Nigeria has a size advantage but its political and economic risks are often priced at a premium. For the country, you never say never on policy direction – who would have thought that public debt would reach about N100 trillion despite oil sales?”

Both local and foreign investors are showing Nigerian assets some love. At the recent primary market auction, the CBN sold N57 billion worth of instruments across 91-day, 182-day, and 364-day maturities, matching the amount offered.

Investment firms said stop rates for the 91-day and 182-day maturities dropped to 2.44% and 4.22%, respectively, from previous rates of 7.00% and 10.00% Naira Rises by 19% as Forex Market Pressures Ease

The 364-day maturity rate also decreased to 8.39% from 12.24%. Total subscriptions reached N1.1 trillion, resulting in a bid-to-cover ratio of 20.2x, with the highest demand seen for the 364-day maturity.