Nigeria’s 10-Year Eurobond Yield Spike To 14.23% In July

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Nigeria’s $1.5 billion Eurobond yield with a maturity of February 2031 rose to 14.29% as of July 12, 2022, according to data from the Debt Management Office.

The yield was about 13.4% at the end of June and was as low as 8.6% at the end of the first quarter of 2022 (Mar 31).

Nigeria’s ten-year Eurobond closed the first half of the year at a yield of 13.45% or $69.8 in unit price pointing to one of the worst yields in years for Africa’s largest economy. The current price is now $66.7.

Nigeria’s 10-Year Eurobond Yield Spike To 14.23% In July

The bond carries a coupon rate of 7.875% per annum, which is the interest received by original subscribers of the bond who prefer to hold to maturity.

Bonds are investment securities that trade just like stocks and their price is determined by the forces of demand and supply.

When investors show a lack of interest in bonds, the prices fall and the yield rises thus making it more difficult for cheaper borrowing.

Nigeria has stated that it does not have any immediate plans to tap the Eurobond market due to the high yield environment.

Issuing bonds in this market will cost the government more when it comes to paying back.
The lack of Eurobonds also shuts out an important source of dollar inflows for the country.