Nigeria Honors Financial Commitments, Redeems $500m Bond

According to the Debt Management Office, Nigeria has successfully repaid a Eurobond worth $500 million that reached maturity on July 12, 2023. 

The DMO, in a statement posted on its website, mentioned that the Bond was initially issued in July 2013 with a duration of 10 years and carried an annual coupon rate of 6.375 percent.

The statement read in part, “Nigeria re-affirms its commitment to meeting its debt service obligations as it redeems a $500m Eurobond on its due date on July 12, 2023.

“The Eurobond was issued in July 2013 (as part of a dual-tranche USD1 billion Eurobond) for a tenor of 10 years at a coupon of 6.375 percent annum.”

Additionally, the Debt Management Office assured bond investors that Nigeria remains steadfast in its commitment to fulfilling its debt obligations.

“Nigeria’s successful redemption of its Eurobonds and diaspora bond in the ICM over the past six years is a demonstration of its strong debt management operations and planning,” the statement added.

Furthermore, it was revealed that Nigeria had previously redeemed a $500 million Eurobond in July 2018, another $500 million Eurobond in January 2021, and a $300 million diaspora bond in June 2022. The recent redemption of the $500 million Eurobond brings the total value of securities redeemed by Nigeria in the international capital market to $1.8 billion.

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As of March 2023, Nigeria’s Eurobond debt stood at $15.62 billion, as reported by The EYEWITNESS9JA NEWS. The Federal Government’s low revenue generation has raised concerns, with former Minister of Finance, Budget, and National Planning, Zainab Ahmed expressing worries about the government’s inability to generate sufficient revenue.

Nigeria has heavily relied on oil as its main revenue source, which has been negatively impacted by reduced production and the recent removal of subsidies, further exacerbating revenue shortfalls.

While speaking about the implementation of the 2022 budget, Ahmed said, “Revenue generation remains the major fiscal constraint of the federation.”