FG begins N4tr GenCos debt repayment, unveils N590b first tranche bond

The Federal Government has begun the process of repaying the N4tr debt owed to power generation companies with the launch of a N590b first-tranche bond issuance.

The initial tranche, part of a wider N4tr NBET Finance Company Plc Bond, is guaranteed by the Federal Government. It comprises N300bn in cash bonds to be issued to the market and N290 billion in non-cash bonds to be directly allotted to GenCos on identical terms.

It was gathered that details contained in the bond term sheet revealed that the Series 1 bond would be issued between November and December 2025 with a seven-year tenure on a fixed-rate coupon, redeemed on an amortising basis and paid semi-annually in arrears. CardinalStone Partners Limited is serving as the lead issuing house and financial adviser.

It will be listed on the Nigerian Exchange and the FMDQ Securities Exchange, and will qualify under the Trustee Investment Act, making it eligible for investment by pension fund administrators, banks, asset managers, insurers and high-net-worth investors.

The issuer also retains the discretion to absorb oversubscription of up to N1.23 trillion, creating room for additional non-cash bond allocations to GenCos if required.

The term sheet added: “Pricing will be based on the yield of the seven-year FGN bond plus a spread, and the issuance will be conducted through a book-build process. The minimum subscription is N5m, representing 5,000 units at N1,000 each, with additional subscriptions in multiples of N1,000.