MTN Nigeria, Nigeria’s leading mobile network operator (MNO), has raised N125 billion via series 6&7 commercial paper notes to diversify its financing options.
Commercial paper refers to a short-term, unsecured debt obligation that is issued by financial institutions and large corporations as a means of raising fund cheaper than other alternatives.
The MNO made this disclosure in a statement signed by its Company Secretary, Uto Ukpanah, to the Nigeria Exchange Limited.
According to the statement, the issuance of commercial paper notes is in line with the company’s strategy to continue diversifying its funding sources and reducing its average cost of debt.
The telecom operator further hinted that the proceeds from the CP would be applied towards short-term working capital requirements.
It clarified: “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”).
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”, the telecom operator added.
An analysis of the fund raising initiative showed that 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.
Commenting on the initiative, the CEO, Karl Toriola 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.”
