Let’s Talk about MTN Nigeria’s new N110 Billion 13.0% Fixed Rate Bonds Issuance

MTN Nigeria Communications Plc announced earlier today that it had successfully completed the issuance of its N110 billion Series 1, 13.0% Fixed Rate Bonds which will be due in 2028. Business Elites Africa understands that the 7-year bond is part of the telco’s larger N200 billion Bond Issuance Programme.

A corporate action by MTN Nigeria described the N110 billion Fixed Rate Bonds as the largest corporate bond issuance in the Nigerian capital market so far this year. It is also the first time MTN Nigeria is taking advantage of funding options in the Nigerian bond market. The company had hitherto preferred commercial papers.

While commenting on the bond issuance, MTN Nigeria’s Chief Executive Officer Karl Toriola said: “we are very proud of this landmark transaction, which is the first ever telco bond issued in Nigeria and the largest corporate bond issuance this year. The domestic debt capital market has given us the opportunity to further diversify our funding sources and extend the maturity of our debt portfolio and profile to match investment in infrastructure. The strong support for this transaction, given the challenging environment, is a reflection of the depth of the market, and investor confidence in MTN Nigeria’s long-term strategy, our management team, and the overall telecoms industry.”

Do note that the book building process for the transaction began on April 9th, 2021 and was completed on April 16th, 2021. Chapel Hill Denham Advisory Limited served as the lead issuing house. Other joint issuing houses include: Stanbic IBTC Capital, DLM Advisory, FCMB Capital Markets, FBNQuest Merchant Bank, Rand Merchant Bank and Vetiva Capital Management.

A wide range of high net worth and quality investors participated in the transaction, including pension funds, banks, asset managers, etc. At the end of the day, as much as N132.1 billion was received in total orders, indicating a 1.32 over subscription rate as against the intended N100 billion. The issue was launched at a clearing coupon of 13.0% with N110 billion in qualified bids.

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