MTN Nigeria Communications PLC has successfully raised ₦75.18 billion through its Series 11 and 12 Commercial Paper (CP) issuance, surpassing its initial ₦50 billion target by an impressive 50%. This achievement highlights strong investor confidence in the telecom giant’s financial health and strategic direction.
Robust Investor Interest and Competitive Yields
The issuance, conducted under MTN Nigeria’s ₦250 billion Commercial Paper Issuance Programme, garnered significant attention, achieving a subscription rate of 150%. The CPs, issued on November 7, 2024, were split into two tranches:
- 181-day tenor: Yielding 27.50%.
- 265-day tenor: Yielding 29.00%.
The 265-day tranche attracted particular interest due to its competitive yield, which closely aligned with the 364-day Nigerian Treasury Bill rate of 29.84% as of November 6, 2024. Notably, yields for this issuance increased by 384 basis points in just two weeks, reflecting the shifting monetary landscape.
Strategic Timing Amid Macroeconomic Challenges
MTN’s issuance comes at a time of significant monetary policy adjustments, with the Central Bank of Nigeria expected to implement further interest rate hikes to combat inflation and exchange rate pressures. Despite regulatory challenges, including the National Pension Commission’s restriction on pension fund participation in commercial paper transactions, the offering drew participation from a diverse group of institutional investors, such as banks, insurance companies, and asset managers.
Strengthening Operational Efficiency
Proceeds from the ₦75.18 billion issuance will address MTN Nigeria’s immediate working capital needs, ensuring enhanced operational efficiency and the fulfilment of short-term financial commitments.
“The strong participation and competitive yields achieved underscore the market’s confidence in MTN Nigeria’s financial health and operational strategy,” stated Uto Ukpanah, MTN Nigeria’s Company Secretary.
This successful funding round positions MTN Nigeria to navigate Nigeria’s challenging macroeconomic environment while maintaining its leadership in the telecommunications sector.
—ThePoint Newspaper
