Nigeria’s long-term Eurobonds faced renewed pressure in October, as global investors showed caution over the country’s fiscal outlook and rising global interest rates.
The longer-dated notes—particularly the 7.625% November 2047 and 8.25% September 2051 issues—saw notable price declines before staging a mild recovery towards month-end.
Trading data compiled by the Debt Management Office (DMO) and Bloomberg showing activities on Nigeria’s Euro bonds in the period ended October 1 – 21 revealed that the 2047 bond closed at US$88.058, while the 2051 bond ended the month at US$92.318—both recovering slightly from their mid-month lows of US$86.557 and US$90.456, respectively.
The yields on these instruments remained high at 8.87% for the 2047 bond and 9.02% for the 2051 bond, reflecting that investors are demanding higher returns to compensate for Nigeria’s long-term fiscal risks. The weaker bond prices highlight market concerns about the country’s debt sustainability
In contrast, the 9.248% January 2049 bond remained resilient, closing at US$103.088, supported by its higher coupon and sustained investor demand, which helped keep yields relatively stable.
Similarly, the 10.375% December 2034 note attracted solid demand, ending at US$112.215, implying a yield of 8.43% — a reflection of market confidence in Nigeria’s medium-term repayment prospects.
Short-term bonds hold steady amid global uncertainty
While long-dated bonds struggled, Nigeria’s shorter-term Eurobonds remained largely stable so far in October, offering investors safety and steady returns.
The 7.625% November 2025 and 6.500% November 2027 notes traded near or slightly above their face value throughout the month.
The 2025 Eurobond opened at US$100.195 and closed slightly higher at US$100.250 by October 21, showing a modest gain as risk-averse investors favored shorter maturities.
The 2027 note also edged up from US$100.632 to US$100.706, underscoring sustained interest in short- to medium-term sovereign paper.
Yields on these short-term bonds remained compressed—4.26% for the 2025 issue and 6.13% for the 2027 note—well below their coupon rates.
Analysts attribute this to investors’ confidence in Nigeria’s near-term repayment capacity, buoyed, maybe, by foreign exchange liquidity.
Mid-tenor bonds show mixed performance
Bonds maturing between 2029 and 2031 showed moderate movements, as investors weighed the outlook for global monetary policy and Nigeria’s fiscal management.
The 8.375% March 2029 Eurobond slipped slightly from US$103.919 to US$103.610, while the 7.143% February 2030 note gained marginally to US$99.439.
The 8.747% January 2031 bond stayed firm at around US$104.727, supported by stable demand, while the 9.625% June 2031 issue rose to US$108.949, making it one of the month’s stronger performers.
Yields on these mid-term notes ranged between 7.16% and 7.63%, showing that investors were still willing to take moderate risk for reasonable returns.
Cautious optimism as yield curve steepens
Overall, Nigeria’s Eurobond market in October reflected cautious optimism. Short-term bonds held firm; mid-tenor instruments remained broadly stable, but long-dated bonds stayed under pressure due to inflation and fiscal worries. The yield curve continued to slope upward, indicating higher compensation for holding longer maturities.
Despite global headwinds and domestic challenges, investor participation remained steady. Market analysts say this shows continued faith in Nigeria’s ability to manage its external debt obligations—provided the government sustains fiscal reforms and oil revenues remain strong.
What you should know
In the 2025 budget, the Federal Government projected additional financing totaling N13.077 trillion. This is made up of:
- New Borrowings of N9,218,348,934,936 comprising
Domestic Borrowings of N7,374,679,147,949
Foreign Borrowing N1,843,669,786,987
- Multi-lateral / Bi-lateral Project-tied Loans N3,545,996,006,420.
As of June 30, 2025, FG has borrowed N6.17 trillion from bond and treasury bills issuances, according to data published by DMO.
On October 7, President Bola Tinubu had requested the national assembly to approve a plan to borrow $2.35 billion in external capital to finance part of the 2025 budget deficit and refinance Nigeria’s maturing Eurobonds.
Prior to the request, Wale Edun, the Minister of Finance, had in November 2024, said approximately $1.7 billion was expected from the Eurobond offer and $500 million from sukuk financing to strengthen the country’s finances and support economic reforms.
