Core Securities Limited

MTN Nigeria Communications Plc has commenced its Commercial Paper (CP) Issuance (Series 1 & 2 of N50 billion each)  under its N100 billion CP issuance programme on Thursday.

In a statement issued by the company and seen by Nairametrics, the telco explained that the issuance has a tenor of 180 days (CP 1) and 270 days (CP 2) with a discount rate of 4.6890% – 4.8797% (CP1)  and 5.8500% – 6.000% (CP2).

Nairametrics had reported a few days ago when the telecommunication company notified the Nigerian Stock Exchange about the issuance.

Why it matters: The issuance is important to the telco, as it intends using the proceeds to its working capital and general corporate purposes in Nigeria. This issuance under the CP Programme represents MTN Nigeria’s debut in the domestic debt capital market.

DetailsIssuer;  MTN Nigeria Communications Plc.

Arranger: Chapel Hill Denham Advisory Limited.

Tenor: 180 days (commercial paper 1)     270days (commercial paper 2).

Discount Rate: 4.6890% – 4.8797% (commercial paper 1)    5.6078% – 5.7455% (commercial paper 2).

Implied Yield: 4.8000% – 5.0000% (commercial paper 1)   5.8500% – 6.0000% (commercial paper 2).

Offer Open Date: Thursday, May 28, 2020.

Offer Close Date: Thursday, June 4, 2020.

READ MORE: Nigerian Breweries set to raise N15bn through CP issuance

Settlement Date: Friday, June 5, 2020.

Minimum subscription: N1 million.

Issuance size: N100 billion (series 1 & 2 commercial paper issuance N50billion each).

Issuer Rating: Aa+ (Augusto); AA (GCR).

Tax consideration: Free and clear of withholding Taxes.

MTNN is the leading telecommunications operator in the largest telecoms market in Africa. The company is the largest mobile operator and undisputed market leader in Nigeria, as measured by total mobile subscribers (c. 70 million), active data users (c. 26.8 million), revenue (almost 50% of industry), and profit pool.

MTNN is well-positioned for the long term, with its unmatched investments in its infrastructure – most expansive 2G, 3G, and 4G network, largest fibre network (c. 29,000km) that spans across Nigeria, largest physical and digital distribution platform, and wide range of spectrum holdings – and the exciting market opportunity Nigeria brings.

MTNN is rated Aa+ by Agusto & Co. which reflects the company’s history of strong financial performance – record revenue in excess of N1 trillion (largest revs by a listed corporate), stable and healthy operating profit metrics (+53% EBITDA margin), comfortably low leverage (0.4x Net Debt/EBITDA, 10.8x interest coverage) that is predominantly local currency, and strong free cash flow.

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