Nigeria’s dollar bonds were lower by over 1 point across the curve with S&P revising their outlook on the sovereign to negative from stable. The rating action came on the back of increasing risks to Nigeria’s debt servicing capacity over the next 1-2 years due to intensifying fiscal and external pressures. S&P added that it could further lower the ratings if risks to Nigeria’s capacity to repay commercial obligations worsens. Nigeria’s gross forex reserves have fallen by about $3bn in 2022, reaching $38bn by year-end while funding pressures have risen. It was downgraded last week by Moody’s to Caa1.