MTN Nigeria Communications PLC has announced the successful completion of its Series 11 and Series 12 commercial paper issuances, raising a total of N75.18 billion.
The achievement, revealed in a notification to the Nigerian Exchange (NGX) and signed by the company’s secretary, Uto Ukpanah, is part of its N250 billion Commercial Paper Issuance Programme.
Originally targeting N50 billion, the offering surpassed expectations with a 150% subscription rate, reflecting robust investor confidence. MTN Nigeria highlighted the strategic timing of the transaction amidst challenging 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 statement noted.
The issuance comprised two tranches with competitive yields. The 181-day paper offered a yield of 27.50%, while the 265-day paper delivered a higher yield of 29.00%. The latter closely aligned with the 364-day Nigerian Treasury Bill, which recorded a yield of 29.84% during an auction on 6 November 2024.
Interestingly, the Treasury Bill yield was 384 basis points higher than the preceding auction’s rate two weeks prior, underscoring a significant shift in the interest rate landscape. Despite these market conditions, MTN Nigeria achieved oversubscription without contributions from pension funds, following a directive from PenCom suspending their participation in commercial papers until new SEC guidelines are issued.
The funds raised will enhance MTN Nigeria’s short-term working capital, bolster operational efficiency, and support its infrastructure expansion projects. The company aims to meet the rising demand for telecommunications and digital services while maintaining a balanced capital structure.
This latest issuance underscores MTN Nigeria’s strategic approach to leveraging the debt market, ensuring its financial flexibility and sustained growth.