MTN Nigeria Communications PLC has successfully raised N75.18 billion through its Series 11 and 12 Commercial Paper issuance, surpassing its initial target of N50 billion by 50 percent.
In a notice to the Nigerian Exchange Limited, MTN revealed that the issuance, conducted under its N250 billion Commercial Paper Issuance Programme, saw robust investor interest, with a subscription rate of 150 percent
The CPs, issued on November 7, 2024, were divided into two tranches: a 181-day tenor with a yield of 27.50 percent and a 265-day tenor with a yield of 29.00 percent.
According to the company’s statement signed by its Company Secretary, Uto Ukpanah, the 265-day tranche drew particular attention as its yield closely matched the 364-day Nigerian Treasury Bill rate, which stood at 29.84 percent as of November 6, 2024.
The yields reflect a substantial increase, rising by 384 basis points in just two weeks.
According to MTN, the issuance was well-timed given the ongoing monetary policy changes that are expected to result in additional interest rate hikes.
The Central Bank of Nigeria is spearheading these actions to address inflation and exchange rate pressures amid the difficult macroeconomic climate of the nation.
Despite regulatory barriers, a large number of institutional investors, including banks, insurance companies, and asset managers, took part in the offering. MTN noted that the success of the offer was unaffected by the National Pension Commission’s recent decree prohibiting pension funds from engaging in commercial paper transactions.
Emphasising the value of the N75.18 billion raised, the company said the funds would be used to meet MTN Nigeria’s immediate working capital requirements. This action is intended to improve the business’s operational effectiveness and guarantee that it fulfils its short-term financial commitments.
“The strong participation and competitive yields achieved underscore the market’s confidence in MTN Nigeria’s financial health and operational strategy,” the company said.