MTN Nigeria raises N125bn for short-term working capital

MTN Nigeria Communications Plc says it has successfully raised N125 billion via the issuance of commercial paper notes.

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

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 said the issuance of commercial paper notes is in line with its strategy to continue diversifying funding sources and reducing its average cost of debt.

The telco said the proceeds will be applied towards short-term working capital requirements.

“MTN Nigeria Communications PLC (MTN Nigeria) hereby notifies Nigerian Exchange Limited and the investing public of the successful completion of its Series 6 & 7 Commercial Paper issuance under its upsized N250 billion Commercial Paper Issuance Programme (the “CP Issuance”),” the notice reads.

“MTN Nigeria sought to raise N100 billion, and the offer recorded 146% subscription with N125 billion issued across both series. This represents the largest aggregate CP issuance within a calendar year by any corporate in Nigeria’s debt capital markets.

“MTN Nigeria issued 181-day commercial paper at a yield of 13.00% and 265-day commercial paper at a yield of 13.50%, with an issue date of 23 August 2023.”

The arranger and dealer for the transaction was Stanbic IBTC Capital Limited, while Chapel Hill Denham Advisory Limited, Coronation Merchant Bank Limited, FBNQuest Merchant Bank, FCMB Capital Markets Limited and Quantum Zenith Capital and Investments Limited were the joint dealers.

Commenting on the commercial paper issuance, Karl Toriola, MTN Nigeria’s chief executive officer, said: “We are pleased with the support received from the investor community, having recorded 146% subscription.”

“This reflects MTN Nigeria’s robust financial capacity, the brand’s strength, and our leading role in the industry.”