The Geregu Power Plc N40.09 billion Series 1 bond has been placed in credit default after the company failed to meet its eighth coupon payment and fourth bullet principal repayment, data published by FMDQ Securities said.

The affected instrument is a seven-year, 14.5 per cent senior unsecured fixed-rate bond issued on July 28, 2022 and scheduled to mature on July 28, 2029.

FMDQ’s listed-bonds platform currently identifies the status of the Geregu Power Series 1 bond as “credit default in the 8th coupon payment and fourth bullet principal repayment.”

The exchange lists the issue amount at N40.09 billion and the tenor at seven years.

The bond was issued under Geregu’s N100 billion multi-issuance programme. Agusto & Co had previously assigned the instrument an A- rating, noting that the company’s operating cash flows had been irrevocably and unconditionally pledged as the primary source of servicing the bond obligations.

The default status comes against the backdrop of persistent liquidity challenges in the electricity market, where generation companies (GenCos) have historically faced delays in receiving payments for electricity supplied to the national grid.

Geregu Power, one of Nigeria’s major power generation companies, operating a 435MW gas-fired plant in Kogi State, generates electricity for supply through the Transmission Company of Nigeria to the Nigerian Bulk Electricity Trading Plc (NBET).

The development is also notable given the Federal Government’s ongoing efforts to address legacy liabilities in the electricity market.

In January, the government raised N501.02 billion through the inaugural tranche of its Presidential Power Sector Debt Reduction Programme to begin settling outstanding obligations to generating companies.

Geregu was among the generation companies that signed settlement agreements with NBET under the programme.

The government’s bond programme was designed to restore liquidity across the electricity value chain and improve the financial position of generation companies burdened by unpaid receivables.

The settlement agreements involving five generation companies, including Geregu, had a combined negotiated value of about N827.16 billion, according to details released on the programme.