Nigeria’s dollar-denominated government bonds declined on Friday ahead of a review of its credit rating by S&P Global.
The decline follows last week’s downgrading by another rating agency, Moody’s.
Reuters reported that Nigeria’s bonds dropped as much as 2.659 cents in the dollar, with the 2038 maturity falling the most, down to 69.189 cents, according to Tradeweb data.
It said the bonds had fallen for two days in a row, a situation attributed to a combination of global risk-off sentiment and Moody’s downgrade, with the 2038 maturity’s price falling as low as 68.528 cents. It then recovered to as high as 73.375 cents before Friday’s drop.
Last week, Moody’s downgraded Nigeria to Caa1 from B3, saying the government’s fiscal and debt position was expected to keep deteriorating. It also downgraded nine Nigerian banks.
Reacting to Moody’s action, minister of finance, budget and national planning, Zainab Ahmed,said it was a surprise, but assured that government was already addressing the agency’s concerns.
“Moody’s downgrade came as a surprise to us because we had presented all the work that we have been doing to stabilize the economy
“But these are external rating agencies that don’t have the full understanding of what is happening in our domestic environment,” Ahmed stated.
She expressed optimism that the rating by S&P, expected today (Friday) would be more positive.
