Nigeria’s dollar-denominated Eurobonds are trading at yields of up to 8.2 per cent, underscoring the premium international investors continue to require for holding the country’s longer-term sovereign debt even as the prices of several outstanding bonds have improved.
Data from the Debt Management Office, drawn from Bloomberg, show that yields on Nigeria’s 15 outstanding Eurobond issues ranged from 5.625 per cent to 8.156 per cent at the close of trading on Monday, 31 August 2026.
Long-Dated Bonds Carry Highest Yields
The highest yield was recorded on Nigeria’s 8.25 per cent $1.25 billion Eurobond due in September 2051, which closed at a price of $100.983 and a yield of 8.156 per cent. The 9.248 per cent $750 million January 2049 bond followed at 8.076 per cent, while the 9.129 per cent $1.1 billion January 2046 Eurobond yielded 8.058 per cent.
The elevated yields on longer-dated securities reflect the higher return investors demand to commit capital to Nigeria for extended periods. In bond markets, higher yields typically signal either greater perceived risk or a higher compensation requirement from investors.
By contrast, shorter-dated Eurobonds were trading at markedly lower yields. The 6.5 per cent $1.5 billion November 2027 bond yielded 5.625 per cent, while the 6.125 per cent $1.25 billion September 2028 bond yielded 5.924 per cent. The yield curve therefore shows a clear premium attached to Nigeria’s longer-term dollar obligations, with investors seeking additional compensation for the risks of holding the debt over 15 to 25 years.
Several Bonds Trade Above Par
Market data also indicate that a number of Nigeria’s Eurobonds are trading above their face value, pointing to stronger secondary-market pricing than their original coupons alone would suggest.
The 10.375 per cent $1.5 billion December 2034 Eurobond closed at $119.428, delivering a yield of 7.211 per cent below its 10.375 per cent coupon at issuance. Similarly, the 9.625 per cent $700 million June 2031 bond traded at $112.391 and yielded 6.553 per cent, compared with its original issue yield of 9.625 per cent.
Investors purchasing these securities in the secondary market at current prices would therefore earn yields below the rates Nigeria offered when the bonds were first issued.
“When a bond trades above its face value, its effective yield falls below its coupon rate, while bonds trading below par generally offer higher effective yields,” said Lagos-based fixed-income analyst Yetunde Oriji.
Implications for Future Borrowing
The current pricing offers a snapshot of how international investors assess Nigeria’s sovereign debt and the cost the country could face when it next returns to the external market. At the long end of the curve, yields above 8 per cent suggest that new long-term external borrowing could remain relatively expensive, particularly when compared with the lower yields available on shorter-dated securities.
The data also show that Nigeria’s credit risk is being priced differently across maturities. Investors are prepared to accept yields of around 5.6 per cent on the 2027 Eurobond, yet demand more than 8 per cent on some securities maturing in the 2040s and 2050s.
For Nigeria, persistently high long-term yields could limit the attractiveness of fresh Eurobond issuance and raise the cost of refinancing external obligations. At the same time, the relatively firm prices of several existing bonds indicate that investors are not uniformly selling Nigerian debt. Some securities remain well above their $100 face value, reflecting ongoing demand and the relatively attractive coupons they offer at current market levels.
“Nigeria’s existing dollar debt remains attractive enough to trade above par in several cases, but investors continue to demand a sizable risk premium for taking on the country’s sovereign exposure over longer periods,” Oriji noted.
