Eurobond Yields Rise despite Record $13bn Oversubscription

• Bond Market Stays Bullish

The Nigerian secondary bond market closed last week on a bullish note, buoyed by strong investor appetite across most maturities.

Sentiment improved markedly as investors sought refuge in fixed-income instruments amid growing volatility in equities and global markets.

The sustained demand drove a modest yield compression, with the average benchmark yield declining by 12 basis points week-on-week to 15.77%. Notably, demand was concentrated in mid-to-long tenor bonds, signalling a preference for duration exposure and expectations of relative yield stability and potential capital gains in the near term.

In contrast, the sovereign Eurobond market weakened, weighed by cautious sentiment toward emerging market debt. The average yield on Nigerian Eurobonds rose by 32 basis points week-on-week to 7.97%, reflecting a repricing of risk amid a stronger U.S. dollar and rising geopolitical tensions between Washington and Abuja.

Investors appeared to price in heightened uncertainty despite Nigeria’s recent strong showing in the international debt market.

Nigeria’s return to the international capital market was nonetheless a resounding success. The country raised $2.35 billion through a dual-tranche Eurobond issuance that attracted $13 billion in orders, representing a 453% oversubscription rate.

The issue comprised $1.25 billion due 2036 at 8.625% and $1.10 billion due 2046 at 9.125%, underscoring robust investor confidence in Nigeria’s credit story despite a turbulent global backdrop.

President Bola Tinubu and Finance Minister Wale Edun hailed the outcome as a clear vote of confidence in the government’s reform-driven economic agenda, while DMO Director-General Patience Oniha described it as a strategic milestone in deepening market ac- cess and diversifying funding sources.

According to the Debt Management Office, proceeds from the issuance will be deployed to finance the 2025 fiscal deficit and refinance maturing Eurobonds, with listings planned on the London Stock Exchange, FMDQ, and the Nigerian Exchange (NGX).

The DMO emphasized that refinancing through new issuance aligns with global best practices, mirroring recent approaches by Kenya, Cameroon, and Angola. Meanwhile, Nigeria continues diplomatic engagement with the U.S. to ease emerging frictions over religious freedom and security concerns — a move analysts believe will help sustain foreign investor confidence in the months ahead.