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A Quick Guide to Investing in Eurobonds

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What are Eurobonds?

Eurobond is an investment issued in a currency not native to the issuer’s home country e.g a Nigerian Eurobond which is issued by Nigeria in U.S Dollars. Eurobonds are commonly issued by governments, companies, and international organizations with maturities typically ranging from 5-30 years. Eurobonds allow corporations to raise funds by issuing bonds in a foreign currency. The bonds are also called external bonds because they can be originated in a foreign currency (external currency). Eurobonds are not necessarily denominated in Euros as the name implies. Actually, bonds denominated in US Dollars are better known as Eurodollar bonds, while those denominated in Japanese Yen are called euroyen bonds.

What you need to know

  1. The minimum investment amount is $1,000.
  2. Eurobond Investments on the i-invest app are held to maturity. i.e you cannot pre-liquidate your investment.
  3. There are an array of different bills with different maturity dates and rates.
  4. Coupons are payable semi-annually . i.e twice a year according to the terms of the Eurobond.
  5. Coupon payments are automatically credited into the customer’s wallet on the due date. At maturity, the final coupon payment and principal amount is credited into your wallet.

How do Eurobonds work?

The essence of Eurobonds is that a company can choose any country to issue bonds depending on its economic and regulatory environment (e.g. interest rates in the country, economic cycle, market sizes, etc.). Importantly, Eurobonds are highly liquid and can be converted into cash within one fiscal year.

Piggy bank and some currency notes

Why should you invest in a Eurobond?

Eurobonds present advantages to both the issuers and investors alike. By issuing eurobonds, government and corporate issuers get access to international markets that would not ordinarily have been accessible. Eurobonds present investors with the benefit or possibility of achieving a higher yield on investments.

Process flow for Eurobonds

  1. Download the i-invest app on the App Store or Google Play Store.
  2. Register with your BVN, phone number and a valid email address.
  3. Provide a passport photograph, recent utility bill and a valid means of identification for KYC upload.
  4. Fund your wallet from a USD domiciliary account via internet banking or in a branch.
  5. Withdrawals can only be made into an account linked to the customer’s BVN.
  6. The customer bears the transfer charges as applicable, each time they make a transfer from their wallets into their bank accounts.
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