Nigeria redeems its first-ever 10-year $500m Eurobond

The Debt Management Office (DMO) has announced plans to redeem Nigeria’s 6.75 percent $500 million Eurobond which matures on Thursday, January 28, 2021. 

In a recent statement on Wednesday, DMO said the federal government has already provided funds to repay the $500 million Eurobond.

The 6.75 percent $500 million Eurobond, issued in January 2011, was Nigeria’s first foray into the international capital market.

The federal government raised an additional $10.67 million from the international capital market making a total of $11.17 million to finance the implementation of the federal budgets.

“By this development, Nigeria continues to demonstrate in practical terms, its commitment towards honouring all its debt service obligations as and when due,” the DMO said.

Analysts project sustained pressure on the external reserves which could impact the naira in the foreign exchange market.

Since the issuance in 2011, private sector operators, including banks, have raised funds from the international market.

In 2020, Nigeria deferred a Eurobond issuance targeted at funding its budget deficit and refinancing the $500 million Eurobond due to the COVID-19 pandemic.

The 2021 budget has a deficit of N5.60 trillion which is to be funded by borrowings from domestic and foreign sources, multilateral loan drawdowns and privatisation of some moribund assets.

The government plans to lend N2.34 trillion from foreign sources.