MTNN Raises N75bn In Oversubscribed Commercial Paper

MTN Nigeria Communications (MTNN) Plc has raised N75.184 billion through its commercial paper issuance program.

Commercial paper is a type of short-term debt instrument issued by corporations and financial institutions. It is used to raise funds for working capital, and other short-term needs, and is generally considered to be a low-risk investment.

The company, in a statement signed by its secretary, Uto Ukbanah notified Nigerian Exchange Limited and the investing public of the successful completion of its Series 11 & 12 Commercial Paper (CP) issuance under the Company’s N250 billion Commercial Paper Issuance Programme.

The statement said, “we sought to raise N50 billion in the issuance; however, the offer recorded a 150 per cent subscription with N75.18 billion issued. The 181-day and 265-day CP were issued at yields of 27.50 per cent and 29.00 per cent, respectively, with an issue date of November 7, 2024.

“The 265-day Series 12 CP was priced broadly at par with the 364-day Nigeria Treasury Bill instrument, which closed at a yield of 29.84 per cent during the auction held on November 6, 2024.”

It added that, this yield was 384 basis points higher than the closing yield at the auction two weeks earlier, saying, 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.

MTNN said, the success of the transaction is further demonstrated by the level of oversubscription despite the absence of pension funds following the recent suspension of their participation in a commercial paper by the National Pension Commission pending the issuance of substantive guidelines by the Securities & Exchange Commission (SEC).

It noted that the offer recorded participation from asset managers, banks, insurance companies and other qualified institutional investors, saying that the proceeds of the issuance will be applied toward the Company’s short-term working capital requirements.