MTN Nigeria, one of the country’s leading telecommunications providers, has achieved a significant milestone by successfully raising N52.9 billion through its commercial paper issuance program. The offering consisted of Series 8 and Series 9, part of a larger N250 billion commercial paper program announced by the company.
Investor Confidence and Strong Management
MTN Nigeria’s achievement in fully subscribing to the N52.9 billion offering underscores the strong investor confidence in the company’s performance and management. The telecommunications giant has been navigating a changing market landscape while prioritizing cost-effective funding.
Yields and Issuance Dates
The commercial papers included two series: 182-days and 267-days. The 182-day commercial papers were issued with a yield of 14.00%, while the 267-day commercial papers were issued with a yield of 16.00%. The issuance process was successfully completed on November 7, 2023.
CEO Karl Toriola’s Perspective
Karl Toriola, the CEO of MTN Nigeria, expressed his gratitude for the transaction’s success. He emphasized the changing dynamics of the market and the importance of managing funding costs efficiently. Toriola acknowledged the significant role played by advisors and the investor community in expediting the transaction.
MTN’s Commercial Paper Program
MTN Nigeria initially announced a N150 billion commercial paper program on April 7, 2022, and later revised it to N250 billion on August 22, 2023. This move aimed to reduce the company’s debt costs and diversify its sources of funding. The Series 8 & 9 issuance followed a previous successful issuance of N125 billion in Series 6 & 7 on August 30, 2023.
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Market Response to Rising Finance Costs
Amid rising finance costs due to increasing interest rates, Nigerian companies, including MTN Nigeria, have turned to the bond and commercial paper markets to raise capital. Dangote Cement Plc, another prominent player in the Nigerian corporate landscape, is also seeking to raise funds through a commercial paper program, targeting N300 billion with a 9-series issuance program.
MTN Nigeria’s ability to raise substantial capital through commercial papers reflects its strong market presence and the confidence investors have in its financial stability and management. It also demonstrates the adaptability of Nigerian companies in the face of evolving market dynamics and the pursuit of cost-effective funding solutions.
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