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MTN obtains SEC’s approval to issue N100 billion Series I bond

  • The Series I bond issuance is part of MTN’s new $467.4 million bond issuance programme.
  • It would be issued in two tranches of 4-year tenure and 10-year tenure, respectively.
  • MTN Nigeria said the bond issuance is intended to help diversify its funding sources.

MTN Nigeria said it has obtained regulatory approval from the Securities and Exchange Commission (SEC) to issue a $233.7 million (N100 billion) Series I bond.

The Series I bond is part of MTN Nigeria’s new $467.4 million (N200 billion) bond issuance programme.

A corporate action filed with the Nigerian Exchange and seen by Business Insider Africa explained that the bond would be issued in tranches A and B. Tranche A is a 4-year fixed rate bond while Tranche B is a 10-year fixed rate bond.

“Consequently, MTN Nigeria has received SEC’s approval to launch the Series I (Tranche A) 4-year fixed rate bond and Series I (Tranche B) 10-year fixed rate bond (the “issuance”) under the programme. The issuance continues to reinforce MTN Nigeria’s strategy of diversifying its funding sources in line with its corporate objectives,” said a part of the corporate disclosure by MTN Nigeria.

Note that the book-building process for both tranches of the Series I bond issuance commenced today September 15, 2022.

The bond issuance is coming barely one week after the telecom company announced a proposed issuance of $54.2 million (N23 billion) commercial paper. Business Insider Africa reported that the Series 3 commercial notes were part of MTN Nigeria’s $353.7 million (N150 billion) commercial issuance programme.

According to Investopedia, bond issuance is one of the ways companies raise money to finance their business growth/expansion. It works in such a way that an “investor agrees to give the corporation a certain amount of money for a specific time. In exchange, the investor receives periodic interest payments. When the bond reaches its maturity date the company repays the investor.”

Recall that MTN Nigeria is in the process of rolling out its 5-G network on a commercial scale. That could be one of the ‘corporate objectives’ it intends to actualise with money realised from the $233.7 million Series 1 bond issuance.

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