MTNN Raises N125bn Through Commercial Paper Issuance

MTN Nigeria has raised N125 billion via commercial paper notes to diversify its financing options.  

This was disclosed via an official statement signed by Company secretary, Uto Ukpanah to Nigeria Exchange Limited.  

Commercial paper refers to a short-term, unsecured debt obligation that is issued by financial institutions and large corporations as an alternative to costlier methods of funding. It is a money market instrument that generally comes with a maturity of up to 270 days.  

The need for commercial paper often arises due to corporations facing a short-term need to cover expenses.

MTNN notified the Nigerian Exchange and the investing public of the successful completion of its Series six and seven Commercial Paper issuance under its upsized N250 billion Commercial Paper Issuance Programme.

It noted that, “MTN Nigeria sought to raise N100 billion, and the offer recorded 146 per cent subscription with N125 billion issued across both series. This represents the largest aggregate CP issuance within a calendar year by any corporate in Nigeria’s debt capital markets.

“MTN Nigeria issued 181-day commercial paper at a yield of 13.00 per cent and 265-day commercial paper at a yield of 13.50 per cent, with an issue date of August 23, 2023. The CP Issuance aligns with MTN Nigeria’s strategy to continue diversifying its funding sources and reducing its average cost of debt. The proceeds will be applied towards short-term working capital requirements.”

Chief executive officer, MTN Nigeria, Karl Toriola, said: “we are pleased with the support received from the investor community, having recorded 146 per cent subscription. 

This reflects MTN Nigeria’s robust financial capacity, the brand’s strength, and our leading role in the industry.”

Stanbic IBTC Capital Limited played the role of Arranger and Dealer with Chapel Hill Denham Advisory Limited, Coronation Merchant Bank Limited, FBNQuest Merchant Bank Limited, FCMB Capital Markets Limited and Quantum Zenith Capital and Investments Limited playing the role of Joint Dealers on the transaction.