MTN Nigeria Communications PLC has formally notified the Nigerian Exchange (NGX) and the investing public of the successful completion of its Series 11 and Series 12 commercial paper issuances, raising a total of N75,183,859,000 (Seventy-five billion, one hundred eighty-three million, eight hundred fifty-nine thousand naira).
The announcement, published on the NGX disclosure platform and signed by the company’s secretary, Uto Ukpanah, revealed that the offering is part of MTN Nigeria’s N250 billion Commercial Paper Issuance Programme.
While the company initially targeted N50 billion, the offering recorded an impressive 150% subscription, bringing the final issuance to N75.18 billion.
In its statement, the company described the timing of the transaction as strategic, given the prevailing macroeconomic conditions.
“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 oversubscription was impressive despite the absence of pension funds, following PenCom’s decision to suspend their investments in commercial papers until the SEC releases new guidelines.
What to know:
- MTN Nigeria issued two commercial papers under this program, offering competitive yields to attract a range of investors, with the 181-day paper yielding 27.50% and the 265-day paper providing a higher yield of 29.00%.
- The issuance took place on Thursday, 7 November 2024, marking a strategic move in the debt market. Notably, the 265-day Series 12 commercial paper was priced competitively.
- It aligned closely with the 364-day Nigerian Treasury Bill, which closed at a yield of 29.84% during an auction held a day earlier, on 6 November 2024.
- Interestingly, this yield was 384 basis points higher than the closing yield recorded at the preceding auction just two weeks earlier, reflecting a significant upward adjustment in the market’s interest rate environment.
- This positioning highlights MTN Nigeria’s ability to align its offerings with prevailing market conditions, ensuring robust investor participation.
Backstory
MTN Nigeria Communications PLC recently announced its intention to raise N50 billion through the issuance of commercial paper (CP) as part of its N250 billion Commercial Paper Issuance Programme.
- This latest Series 11 and 12 issuance aims to bolster the company’s short-term working capital and broaden its funding sources.
- The move, outlined in a notification to the Nigerian Exchange Limited and the investing public, reflects MTN Nigeria’s ongoing strategy to leverage the debt market for flexible financial needs while maintaining a balanced capital structure.
Funds from this issuance will drive operational efficiency and growth initiatives, with a focus on expanding infrastructure, improving service delivery, and addressing the rising demand for telecommunications and digital services nationwide.
