MTN Borrows N72.18bn Via Commercial Paper at 29%

The company got the money from the sale of commercial paper to investors, who were willing to part with their funds at attractive rates.

According to a statement issued by MTN Nigeria, it had intention of getting N50 billion from the exercise but it ended up selling issuing N72.18 per cent worth of the notes to investors.

The telco noted that the 144 per cent subscription rate the commercial paper sale recorded affirmed the confidence investors have in the organisation.

Business Post reports that the commercial paper issuance was in two series of 13 and 14 under its N250 billion Commercial Paper Issuance Programme, with Stanbic IBTC Capital Limited as the lead arranger and dealer and CardinalStone Partners Limited, Chapel Hill Denham Advisory Limited, Cordros Capital Limited, Coronation Merchant Bank Limited, FCMB Capital Markets Limited, Meristem Capital Limited, Quantum Zenith Capital & Investments Limited and Rand Merchant Bank Nigeria Limited as joint dealers.

The Series 13 was with a tenor of 180 days issued at a yield of 27.50 per cent and the Series 14 was with a tenor of 270 days at a yield of 29.00 per cent.

“We are pleased with the support received from the investor community, having recorded 144 per cent subscription with participation from a broad range of investors.

“This further reinforces MTN Nigeria’s financial position, brand strength and market leadership amidst the challenging macro conditions,” the chief executive of MTN Nigeria, Mr Karl Toriola, said.

To avoid bank loans, which come with high interest rates, companies explore other fund raising options in the capital market with lower rates like bond and commercial paper sales.