MTN Nigeria raises N125b in series 4 & 5 of its Commercial Paper issuance program

MTN Nigeria has raised N125bn through the issuance of commercial papers to promote its short-term working capital and funding requirements.

In a notice to the Nigerian Exchange Limited on Monday, the company declared that it had completed the Series 4 & 5 Commercial Paper issuance under its N150bn Commercial Paper issuance program.

In a statement signed by Ufo Ukpanat, the company’s secretary, the telecommunication giant revealed that it sought to raise N100billion, and the transaction was 125 per cent oversubscribed to the tune of N125billion to enable the company to disburse the fund on short-term working capital and funding requirements.

The commercial papers included a 188-day CP at a yield of 11.00 per cent and 267-day commercial paper at a yield of 12.50 per cent.

MTN’s previous raise via commercial papers

In April 2022, MTN Nigeria signed the issuance of N127 billion ($306.3 million) series 1 and 2 commercial paper (CP), the largest of such debt instruments to be issued in the country.

During the signing ceremony, Karl Toriola, Chief Executive Officer, explained that commercial paper issuance is part of a strategy to diversify its financing options.

“We are delighted to have successfully concluded what will go into the record books as the largest Commercial Paper issuance in Nigeria.”

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

The Guardian learnt that the CP is under the company’s N150 billion ($361.8 million) commercial paper program and would go into boosting the telco’s working capital and serving other general corporate purposes.

Each tenor of the commercial paper has two tranches. The first one is an issuance with a 184-day maturity that would be priced at a 7.5% yield, and the second is a 254-day-tenured Series 2 issue priced at an 8.5 per cent yield.

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MTN’s winning run continues

MTN Group Limited is a South African multinational mobile telecommunications company operating in many African and Asian countries. Its head office is in Johannesburg.

It had 280 million users as of December 2020, making it the world’s eighth-biggest mobile network operator and the largest in Africa. On December 1, 2011, MTN launched 4G and LTE, becoming the second cellular service in South Africa to do so.

The telco is the most profitable company in Nigeria based on publicly published financial statements. According to an audited earning report in February, its revenue increased by 21.64 per cent to N2.012 trillion from N1.654 trillion in 2021, with service revenue contributing 99.7 per cent of the original sum.

Also, from the most recent data from NCC, MTN Nigeria has consistently outperformed the competition, adding 15.4 million new users in 2022 to take the lead ahead of competitors. Also, the business increased its customer base from 73.5 million in December 2021 to 89.02 million in December 2022, a 20.96% increase. Moreover, with a 40.06% market share, MTN dominates the Nigerian telco industry.

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