MTN Nigeria Communications PLC has announced another round of commercial paper issuances, Series 13 and 14, worth up to N50 billion, in a disclosure to the Nigerian Exchange (NGX) signed by its company secretary, Uto Ukpanah FCIS.
This development comes on the heels of the successful completion of MTN’s Series 11 and 12 commercial paper offerings, which raised a substantial sum of N75.18 billion
Building on this momentum, MTN Nigeria has confirmed plans to launch the new Series 13 and 14 commercial papers under its robust N250 billion Commercial Paper Issuance Programme.
This initiative is part of the company’s effort to diversify its funding sources, with proceeds from the new issuance allocated to strengthening short-term working capital and supporting its financial plans.
Through this approach, MTN Nigeria aims to strengthen its liquidity position and effectively address changing market conditions.
Backstory
On November 4th, MTN Nigeria Communications PLC announced plans to raise N50 billion through the issuance of commercial papers (CP) under its N250 billion Commercial Paper Issuance Programme.
- The offering, comprising Series 11 and 12, was designed to strengthen the company’s short-term working capital and diversify its funding sources.
- According to the announcement, the funds raised would support operational efficiency and growth initiatives, including expanding infrastructure, enhancing service delivery, and meeting the increasing demand for telecommunications and digital services across Nigeria.
- By November 15th, 2024, MTN Nigeria disclosed that the Series 11 and 12 issuances had raised an impressive N75.18 billion—a significant 150% subscription rate, exceeding the initial N50 billion target.
- In its statement, MTN Nigeria attributed the success of the transaction to strategic timing, noting that the offering aligned with prevailing macroeconomic conditions. The company remarked:
“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.”
Notably, the issuance achieved this oversubscription despite the absence of pension funds, which were excluded following PenCom’s decision to suspend their investments in commercial papers until new guidelines are issued by the SEC.
Stock Market Performance
MTN Nigeria has maintained a moderate long-term buy trend on the Nigerian stock market. However, in 2024, the stock’s trajectory shifted into a retracement phase, reflecting a pullback in its price action.
- At the start of the year, the stock opened January trading at N264, with a total market volume of 52 million shares recorded for the month. Since then, the stock has experienced a decline, reaching N170 as of the market opening on November 27, 2024.
- This decline is attributed to foreign exchange-related pressures affecting the telecommunications sector, which have significantly increased operational costs, likely dampening investor sentiment.
The issuance of commercial papers by MTN Nigeria is aimed at mitigating these challenges by enhancing operational efficiency and supporting the company’s growth initiatives.
