When a bond goes bad: The Geregu Power default and what it actually triggers under Nigerian law - Businessday NG

Beyond the headlines, what actually happens when a corporate bond defaults in Nigeria? The answer starts with the trust deed, the Companies and Allied Matters Act 2020 (“CAMA”) and the Investments and Securities Act 2025 (“ISA”).

A bond default does not automatically mean insolvency

A missed payment is first a breach of the terms governing the bond. The immediate question is contractual: has an Event of Default occurred, or is a cure or grace period still running?

CAMA’s debenture provisions and sections 281–287 of ISA 2025 provide the broader framework. But default does not make Geregu legally insolvent. The requirements for inability to pay debts under section 572 of CAMA must still be satisfied before a creditor can rely on that ground for winding up.

Put simply, default and insolvency are not the same thing.