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Why Nigeria Is Redeeming Its $500m Eurobond

DMO Set To Auction N150bn Bond On FG's Behalf

It was announced that Nigeria will redeem 6.75 percent $500 million Eurobond on Thursday, January 28, 2021, as it has matured.

This announcement was made by the Debt Management Office (DMO) on Wednesday, stating that the government had made funds ready to repay the $500 million Eurobond.

Nigeria’s 6.75 percent $500 million Eurobonds is the country’s first foray into the International Capital Market, as stated by the DMO.

What is Eurobond?

A Eurobond is a debt system that is not processed in the native country’s currency or the market it is issued in.

What this means is that they are issued in an external currency and are also known as external bonds.

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For example, a company can issue a Eurobond that is denominated in US dollars in China.

What Is Its Importance?

According to Investopedia Eurobonds are important because they help organizations (or countries) raise capital while having the flexibility to issue them in another currency.

Nigeria issuing a Eurobond aids an expansion of the country’s external reserves – these are assets outside the country that are available to the country’s monetary authorities like the Central Bank of Nigeria (CBN).

What the bond also does is help Nigeria diversify its financial coffers. The bond has generated over $10 million from the ICM, with a total of $11 million that will be used to supplement the execution of federal budgets.

The DMO said that “a number of private sector operators, notably Nigerian Banks, have raised US Dollar funds from the ICM following Nigeria’s debut Eurobond in January 2011.

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

About Author

Kindness Udoh is a writer and media enthusiast with vast experience in journalism, copywriting, and features across beats. He also has professional certifications in creative writing. You can reach him via [email protected]

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