MTN’s N115bn bond issuance to boost network expansion, says CEO

Telecommunications giant MTN Nigeria has said it intends to use the net proceeds of its recently completed N115bn Series 1 Fixed Rate Bond issuance to finance its network expansion, optimise working capital and for general corporate purposes.

Karl Toriola, chief executive officer, MTN Nigeria, made this known after the telecom company completed the transaction which was reported to have been 1.68 times oversubscribed.

The N115bn bond issuance represents MTN Nigeria’s first issuance under its new N200bn 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 N168.54bn in bids received, representing a 1.68 times oversubscription (of the intended N100bn issuance).

MTN issued the Series 1 Tranche A and Tranche B Bonds at a clearing ticket of 13.50 percent and 14.50 percent, respectively.

Of the total qualifying bids, MTN Nigeria opted to issue a combined value of N115bn across both tranches – N10.09bn in the four-year Tranche A and N104.91bn in the 10-year Tranche B.

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.

Speaking on the development, Toriola said the company was pleased with the outcome of its third outing in the domestic bond market, and that 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.

He said 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.

“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,” Toriola said.

“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.

Toriola 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,” the MTN Nigeria chief said.

“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,” he said.