Nigerian Eurobonds Yield Falls Amidst $5bn Derivative Borrowing
The average yield fell as Nigerian Eurobonds rallied in the international market on Wednesday, boosted by foreign investors’ appetite for the country’s reforms and improved macroeconomic data.
Inflation continues to decline, with some analysts projecting lower double-digit figures for the first half of 2026 following the rebasing of the consumer price index last year.
Despite global economic uncertainties due to the U.S.-Iran conflict, Nigeria’s US dollar bonds have been shielded significantly from riotous selloffs. Most oil-linked issuers’ yields have declined as energy costs pressure mounted.
In its latest update, Cowry Asset Limited told investors that the average yield on Nigerian Eurobonds dropped 24bps to 7.15%, underscoring renewed global investor appetite and a broadly positive sentiment toward Nigeria’s dollar-denominated sovereign obligations.
Offshore investors traded cautiously on Tuesday. The short end saw mild buying interest, with NOV 2027 and SEP 2028 yields declining by 5 bps each to 5.86% and 6.14%, respectively.
Meanwhile, FEB 2030 dipped 3bps to 6.79%. Conversely, the mid-to-long end experienced modest sell pressure, as MAR 2029 and JAN 2031 yields rose by 3bps and 4bps to 6.26% and 7.22%, respectively, alongside slight upticks across longer maturities.
The Nigerian government has revealed plans to borrow up to $5 billion through a derivatives agreement with First Abu Dhabi Bank, as the war in Iran keeps the costs of traditional debt issuance elevated.
The proceeds from the total return swap with Abu Dhabi Bank will go toward infrastructure projects and refinancing more expensive domestic and external debts, according to a document filed in the National Assembly. Standard Chartered Leads West Africa in M&A Deal Value