MTN Nigeria floats N23bn commercial paper to improve working capital

MTN Nigeria Communications Plc says it is in the process of issuing up to N23 billion series three commercial paper notes.

The telco announced this on Tuesday in a corporate filing on the Nigerian Exchange Limited (NGX) signed by Uto Ukpanah, the company secretary.

It said that the proposed series three commercial paper is part of its N150 billion issuance programme.

Commercial papers are short-term debt securities typically issued by creditworthy corporations looking to raise funds from the public to meet working capital requirements as a viable alternative to bank credit.

This means that companies borrow money from the public by issuing short-term promissory notes, usually unsecured, with the promise of repayment at the date of maturity.

“MTN Nigeria Communications Plc, hereby, notifies Nigerian Exchange Limited and the investing public of its proposed issuance of up to N23 billion series three commercial paper notes under its N150 billion commercial paper issuance programme,” the notice reads.

“The issuance is part of the company’s strategy to diversify its financing options, with the funds deployed towards working capital and general corporate purposes.

“Further details on the issuance as well as subsequent issuance will be communicated to the market as the transaction occur.”

MTN GROUP SETTLES $300 MILLION EUROBOND BEFORE PAYBACK DATE

MTN Group, the parent company, also announced an early settlement of eurobonds worth $300 million.

According to the telco, the early repayment brings its dollar-denominated debt down to “35 percent of total holding company (HoldCo) debt on a H1 2022 pro forma basis.”

Eurobonds are issued by large companies or governments in exchange for long-term loans from the public.

In late August, the telco invited eligible holders of the $750 million eurobond — due to mature in November 2024 — to tender their notes for purchase by the company for cash.

“The offer attracted tenders of more than $482-million, significantly more than the $250-million originally intended for early settlement,’ MTN said.

“As a result, MTN raised the final acceptance amount to $300-million, which will be settled on 6 September 2022.

Speaking on the development, Ralph Mupita, MTN Group president and chief executive officer, said: “In line with our Ambition 2025 strategy, we are committed to deleveraging the balance sheet faster in line with our capital allocation framework.”

“This week’s early settlement supports the delivery of this commitment as well as of the execution and delivery of our medium-term guidance to maintain the Holdco leverage below 1.5x.”