Stronger prices on some dollar bonds contrast with elevated yields on Nigeria’s longer-dated securities….
Nigeria’s borrowing costs in the international bond market remain elevated, with yields on some of the country’s dollar-denominated Eurobonds climbing above eight per cent as investors continue to attach a significant risk premium to longer-term sovereign debt.
The latest market figures show that while several of Nigeria’s outstanding Eurobonds have recorded stronger prices, investors still require higher returns to hold securities that mature decades from now.
Data from the Debt Management Office, based on Bloomberg figures, showed that yields across Nigeria’s 15 outstanding Eurobond issues stood between 5.625 per cent and 8.156 per cent at the close of trading on Monday, August 31, 2026.
The highest yield was recorded on the 8.25 per cent $1.25bn Eurobond maturing in September 2051. The bond closed at $100.983, translating to a yield of 8.156 per cent.
It was followed by the 9.248 per cent $750m Eurobond due in January 2049, which ended the session with a yield of 8.076 per cent.
The 9.129 per cent $1.1bn Eurobond maturing in January 2046 also remained above the eight per cent mark, with a yield of 8.058 per cent.
The pattern points to a widening cost attached to Nigeria’s longer-term dollar obligations, as investors seek additional compensation for the risks associated with keeping their funds tied to the country for extended periods.
Bond yields generally move in the opposite direction to prices. As demand pushes a bond’s market price higher, its effective yield falls, while weaker prices can result in higher yields.
Nigeria’s shorter-dated Eurobonds, however, were trading at considerably lower yields.
The 6.5 per cent $1.5bn Eurobond maturing in November 2027 closed with a yield of 5.625 per cent, while the 6.125 per cent $1.25bn bond due in September 2028 yielded 5.924 per cent.
The difference between the short- and long-term securities indicates that investors are placing a higher risk premium on Nigeria’s debt with maturities stretching into the 2040s and 2050s.
The market data also indicate that a number of Nigeria’s Eurobonds are trading above their original $100 face value, a sign that some investors continue to place strong value on the securities despite the elevated yields at the longer end of the curve.
One notable example is the 10.375 per cent $1.5bn Eurobond due in December 2034.
The security closed at $119.428, while its yield stood at 7.211 per cent. Its current yield is therefore significantly below the 10.375 per cent coupon attached to the bond when it was issued.
A similar trend was recorded on Nigeria’s 9.625 per cent $700m Eurobond maturing in June 2031.
The bond traded at $112.391 and produced a yield of 6.553 per cent, well below its original 9.625 per cent coupon.
The current pricing of Nigeria’s Eurobonds provides an indication of how international investors are assessing the country’s sovereign credit risk and could also offer clues about the cost of any future return to the international debt market.
With some long-term Eurobonds yielding more than eight per cent, raising fresh dollar debt with lengthy maturities could remain costly for Nigeria.
The elevated yields also highlight the different levels of risk investors attach to Nigerian debt depending on how long they are required to hold the securities.
While the 2027 Eurobond offers a yield of about 5.6 per cent, investors are demanding more than eight per cent on some bonds extending into the 2040s and 2050s.
For the Federal Government, maintaining such a wide gap could make fresh Eurobond issuance less attractive and potentially increase the expense of refinancing existing external obligations.
The fact that several Nigerian Eurobonds continue to trade above their face value suggests that international investors have not completely turned away from the country’s dollar debt.
Some of the securities continue to attract demand because of their relatively high coupon payments, even as investors remain cautious about Nigeria’s longer-term sovereign risk.
The development comes as Nigeria continues to navigate the challenge of balancing its external financing needs with the cost of accessing international capital markets.
For policymakers, a sustained decline in long-term Eurobond yields would provide a more favourable environment for future external borrowing, while persistently high yields could make dollar-denominated debt an increasingly expensive source of financing.
