MTN completes issuance of N115b bond to enhance network expansion
Telecommunications giant, MTN Nigeria has completed its N115b Series 1 Fixed Rate Bond issuance. The Guardian reports that the transaction was 1.68 times oversubscribed and “represents MTN Nigeria’s first issuance under its new N200b Bond Programme and third bond issuance in the debt capital markets.
The book build for the dual-tranche (four-year Tranche A and 10-year Tranche B) bond issuance began on September 15, 2022 and closed on September 21, 2022 with a total value of N168.54b in bids received, representing a 1.68 times oversubscription (of the intended N100b issuance).
MTN issued the Series 1 Tranche A and Tranche B Bonds at a clearing coupon of 13.50 per cent and 14.50 per cent, respectively. Of the total qualifying bids, MTN Nigeria opted to issue a combined value of N115b across both tranches – N10.09b in the four-year Tranche A and N104.91b in the 10-year Tranche B.
Chief Executive Officer of MTN Nigeria, Karl Toriola, said the company was pleased with the outcome of its third outing in the domestic bond market.
He said the offer was well-received with active participation from a diverse range of investors, including pension funds, insurance companies, asset managers, other financial institutions, and high net-worth individuals.
Toriola added that the successful Series 1 Bond issuance reflects the continued investor confidence in MTN Nigeria and its management team and the depth and resilience of the domestic debt capital market.
The CEO said MTN Nigeria intends to use the net proceeds of the offering to finance its network expansion, optimise working capital and for general corporate purposes.
He said: “We appreciate the investor community for the strong show of support and consider this to be an affirmation of their belief in MTN Nigeria’s value proposition. The Nigerian capital markets continue to present us with the opportunity to raise long-term financing to aid investments in our network and diversify our funding sources. We are very proud of this transaction and thank all parties who contributed to ensuring a successful bond offer. The management of MTN Nigeria is firmly resolved in its strategy to add value to all stakeholders and the growth of the Nigerian telecoms industry.”
He said the bond would reinforce MTN Nigeria’s strategy of diversifying its funding sources in line with its corporate objectives.
“This bond is a clear demonstration of the strength and acceptance of the MTN brand, and the trust placed by the investor community in MTN Nigeria’s company’s leadership, strong financial performance and corporate strategy.
“ As the business continues to expand, MTN Nigeria aims at improving customer services and allow us to pass the high-quality of
our internet connection that include 5G spectrum that awaits regulatory approval.”
Chapel Hill Denham Advisory Limited acted as the Lead Issuing House/Bookrunner, while Vetiva Capital Management, Absa Capital Markets Nigeria Limited, FCMB Capital Markets Limited, Rand Merchant Bank Nigeria Limited, Renaissance Securities (Nigeria) Limited, Stanbic IBTC Capital Limited and United Capital Plc acted as Joint Issuing Houses.