MTN Nigeria Raises N75bn at Elevated Yield from Debt Market
MTN Nigeria Communications PLC has successfully raised more than N75 billion from the debt capital market, the telecommunications company told the Nigerian Exchange Limited and the investing public.
The amount was raised at a higher yield of about 30% for the short-term borrowing the company sought to boost working capital. In its regulatory filing, MTN Nigerian said the series 11 & 12 commercial paper issued was under the company’s N250 billion commercial paper issuance program.
“We sought to raise N50 billion in the issuance; however, the offer recorded a 150% subscription with N75.18 billion issued,” MTN Nigeria said. The company said 181-day and 265-day commercial paper were issued at yields of 27.50% and 29.00%, respectively, with an issue date of Thursday, 07 November 2024.
The 265-day series 12 commercial was priced broadly at par with the 364-day Nigeria Treasury Bill instrument, which closed at a yield of 29.84% during the auction held on Wednesday, 06 November 2024. According to MTN Nigeria, this yield was 384 basis points higher than the closing yield at the auction two weeks earlier.
This represents a well-timed transaction for the company, as interest rates are expected to rise further following the outcome of the auction as monetary policy authorities continue to address interest and exchange rate pressures.
“The success of the transaction is further demonstrated by the level of oversubscription despite the absence of pension funds following the recent suspension of their participation in a commercial paper,” MTN said.
The offer recorded participation from asset managers, banks, insurance companies, and other qualified institutional investors. The proceeds of the issuance will be applied toward the company’s short-term working capital requirements. #MTN Nigeria Raises N75bn at Elevated Yield from Debt Market Nigerian Exchange Enlarges as Investors Gain N295bn
