MTN Nigeria issues historic US$306M commercial paper

NIGERIA – MTN Nigeria, a subsidiary of Johannesburg-headquartered MTN Group Ltd, has announced the issuance of a N127 billion (US$306.3 million) series 1 & 2 commercial paper (CP) on the Nigerian Exchange.

Commercial paper is an unsecured, short-term debt instrument commonly used by companies to raise capital from the public and take care of their short-term financial liabilities.

The issuance consists of two tenors, a 184-day series issuance priced at a 7.50% yield and a 254-day Series 2 issuance priced at an 8.50% yield.

According to the telecommunication giant, the issuance is in line with its N150 billion ($361.8 million) commercial paper program to diversify financing options.

Proceeds from the exercise would go towards boosting the telco’s working capital, as well as serving other general corporate purposes.

We are delighted to have successfully concluded what will go into the record books as the largest Commercial Paper issuance in Nigeria,” said Karl Toriola, MTN Nigeria Chief Executive Officer.

The success of our CP Issuance is a clear demonstration of the strength and acceptance of the MTN brand and the trust placed by the investor community in our company’s leadership, strong financial performance, and corporate strategy.”

The telecommunication giant recently emerged as one of two winners for the 5G spectrum recently auctioned by the Nigerian Communications Commission.

In addition, the company was also recently granted final approval by the Central Bank of Nigeria (CBN) for Momo Payment Service Bank Limited to commence operations license.

The CP issuance represents yet another step toward cementing the company’s leadership in Nigeria’s telecommunications sector.

The company intends to use part of the proceeds to finance the working capital of the Momo payment platform to facilitate its operations.

According to Toriola, the proceeds will also be aimed at improving customer services and high-quality bouquet services that included a 5G spectrum that awaits regulatory approval.

Stanbic IBTC Capital Ltd served as the main book runner for the deal, according to the statement by MTN.

Chapel Hill Denham Advisory Ltd also helped to arrange the deal, alongside Coronation Merchant Bank, FBNQuest Merchant Bank, Standard Chartered Capital and Advisory Nigeria Ltd, FSDH Capital, and UCML Capital.

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