MTN Nigeria, a part of MTN Group Ltd, based in Johannesburg, has announced the issuance of a N127 billion (US$306.3 million) series 1 and 2 commercial paper (CP) on the Nigerian Exchange.
Commercial paper is an unsecured, short-term debt instrument that corporations use to raise funds from the public and pay off short-term financial obligations.
The offering is split into two tenors, with a 184-day Series 1 issuance yielding 7.50 percent and a 254-day Series 2 issuance yielding 8.50 percent.
The issuance is part of the telecommunications giant’s N150 billion ($361.8 million) commercial paper initiative, which aims to diversify funding sources.
The money raised would be used to increase the telco’s working capital as well as for general corporate reasons.
“We are delighted to have successfully concluded what will go into the record books as the largest Commercial Paper issuance in Nigeria.
“The success of our CP Issuance is a clear demonstration of the strength and acceptance of the MTN brand and the trust placed by the investor community in our company’s leadership, strong financial performance, and corporate strategy,” said Karl Toriola, MTN Nigeria Chief Executive Officer.
The telecommunications outfit was recently announced as one of two winners in the Nigerian Communications Commission’s 5G spectrum auction.
In addition, the Central Bank of Nigeria (CBN) has granted Momo Payment Service Bank Limited full authority to begin operations.
The issuing of the CP is another another step toward the company’s continued dominance in Nigeria’s telecoms sector.
Part of the earnings will be used to fund the Momo payment platform’s working capital, allowing the company to expand its operations.
According to Toriola, the funds will also be used to improve customer support and high-quality bouquet services, including a 5G spectrum that has yet to be approved by regulators.
According to MTN’s statement, Stanbic IBTC Capital Ltd served as the deal’s major bookrunner.
