FG clarifies $5 billion Abu Dhabi swap, says no oil assets pledged

The Federal Government has defended its $5 billion Total Return Swap (TRS) facility with First Abu Dhabi Bank PJSC (FAB), saying no oil revenues or strategic national assets were pledged as collateral for the transaction.

The Debt Management Office (DMO), in a Frequently Asked Questions document issued on August 27, 2026, said the facility is secured by naira-denominated Federal Government of Nigeria (FGN) securities, with collateral valued at 133.3% of the amount drawn.

The DMO said the transaction, which has a maximum facility size of $5 billion and a six-year tenor, was approved by the Federal Executive Council (FEC) and the National Assembly.

What the DMO is saying

The government said the TRS allows Nigeria to obtain US dollar liquidity by pledging eligible FGN bonds, while paying interest based on the Secured Overnight Financing Rate (SOFR) plus an agreed margin.

The first tranche is priced at SOFR plus 3.95%, while subsequent tranches will attract SOFR plus 4%.

• “No oil revenues or strategic assets, such as ports or airports, are pledged,” the DMO said.

The facility will be drawn in phases rather than necessarily accessing the full $5 billion at once, the agency noted.

According to the DMO, the funds will be used for budget implementation, priority infrastructure, refinancing of relatively more expensive domestic and external debt and other critical financing needs approved by the President.

The DMO said a TRS provides an additional funding channel and can allow Nigeria to access dollar liquidity more quickly, particularly when international bond markets become volatile or expensive.

The DMO described the additional collateral as a risk buffer rather than a direct cost to the government. It also said the arrangement provides for monthly margining and a five-business-day cure period if the collateral…