Nigeria’s Eurobonds Yield Tumble Amid Hike in Prices

Following a surge in prices, yields on Nigeria’s Eurobonds tumbled as investors’ demand in the secondary market persisted since the beginning of the month of November 2022, latest data by Debt Management Office (DMO) has revealed.

Experts attributed the hike in prices to the Naira redesigning policy of the Central Bank of Nigeria (CBN) as high network investors are demanding risk-free instruments to preserve their wealth in foreign currency.

“Once there is high demand in Eurobond, the prices will be increasing and the yield will drop. Part of the reasons for lower yields on Eurobonds could be the recent policy of CBN on Naira redesign, ”said a finance expert who pleaded anonymity.

Analysis of the DMO data revealed that the price of 6.375% $500m JUL 2023 Eurobond that opened November 1, 2022 at $97.892 and 8.525 per cent show its price increasing to $99.444, while its yield dropped to 6.203 per cent as of November 10, 2022.

Also, 10-year 7.875% $1.5bn FEB 2032 Eurobond that opened in November with a yield of 14.725 per cent dropped to 12.417per cent in the period under review.