MTN Nigeria has successfully raised N125 billion through commercial paper notes, a move aimed at expanding its financing alternatives. This announcement was made in an official statement signed by Uto Ukpanah, the company’s secretary, and submitted to the Nigeria Exchange Limited.
Commercial paper represents a short-term, unsecured debt instrument commonly issued by financial institutions and large corporations as a more cost-effective means of obtaining funds. Typically, these money market instruments have a maturity period of up to 270 days and are sought after when companies require short-term funding to meet their financial obligations.
Under its expanded N250 billion Commercial Paper Issuance Program, MTN Nigeria disclosed to the Nigerian Exchange and the investing public that it had successfully concluded its Series six and seven Commercial Paper issuances. The statement indicated that MTN Nigeria initially aimed to raise N100 billion but achieved an impressive 146 percent subscription rate, resulting in N125 billion issued across both series.
This achievement marks the highest total Commercial Paper issuance by any corporate entity in Nigeria’s debt capital markets within a calendar year.
MTN Nigeria issued 181-day commercial paper at a yield of 13.00 percent and 265-day commercial paper at a yield of 13.50 percent, with an issuance date of August 23, 2023. The company’s decision to engage in Commercial Paper issuances aligns with its strategy to diversify its funding sources and reduce its average cost of debt. The proceeds from this issuance will be directed towards fulfilling short-term working capital needs.
Karl Toriola, the Chief Executive Officer of MTN Nigeria, expressed satisfaction with the strong support from the investor community, noting a 146 percent subscription rate. He highlighted this as evidence of MTN Nigeria’s robust financial capacity, strong brand reputation, and leading position in the industry.
Stanbic IBTC Capital Limited served as the Arranger and Dealer for this transaction, while Chapel Hill Denham Advisory Limited, Coronation Merchant Bank Limited, FBNQuest Merchant Bank Limited, FCMB Capital Markets Limited, and Quantum Zenith Capital and Investments Limited acted as Joint Dealers in the transaction.