Nigeria's Eurobond yields hit 8.2% as long-term sovereign risk premium persists

Nigeria's dollar-denominated Eurobonds closed with yields as high as 8.16 per cent on Monday, 31 August 2026, as investors still price in significant long-term sovereign risk. Data from the Debt Management Office, sourced from Bloomberg, show yields on the country's 15 outstanding Eurobond issues ranged from 5.625 per cent to 8.156 per cent.

Longer-dated bonds carry the highest yields

The highest yield, 8.156 per cent, was recorded on Nigeria's 8.25 per cent $1.25bn Eurobond due in September 2051. It closed at a price of $100.983. The 9.248 per cent $750m January 2049 bond followed with a yield of 8.076 per cent, while the 9.129 per cent $1.1bn January 2046 Eurobond yielded 8.058 per cent.

Shorter-dated securities traded at much lower yields. The 6.5 per cent $1.5bn November 2027 bond yielded 5.625 per cent, and the 6.125 per cent $1.25bn September 2028 bond yielded 5.924 per cent. That gives the yield curve a clear upward slope, with investors demanding extra compensation for holding Nigerian debt over 15 to 25 years.

Some bonds trade above face value

Several Eurobonds are trading above $100 face value, a sign of stronger market pricing than their original coupons alone suggest. The 10.375 per cent $1.5bn December 2034 Eurobond closed at $119.428, giving a yield of 7.211 per cent, below its 10.375 per cent coupon. The 9.625 per cent $700m June 2031 bond traded at $112.391 and yielded 6.553 per cent, compared with its original issue yield of 9.625 per cent.

"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 Yetunde Oriji, a Lagos-based fixed income analyst.

What it means for Nigeria

The pricing shows how international investors view Nigeria's sovereign debt. Yields above 8 per cent on the longest maturities mean new external borrowing could remain relatively expensive, especially against the lower yields on short-dated paper. Sustained high long-term yields could constrain fresh Eurobond issuance and raise the cost of refinancing external obligations.

At the same time, the fact that several existing bonds trade well above $100 face value suggests investors are not uniformly dumping Nigerian debt. "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 added.