MTN Nigeria Opens N200 Billion Commercial Paper Issuance for Investors

Nigeria’s biggest telecom provider, MTN Nigeria has opened up a N200 billion Commercial Paper (“CP”) Issuance Programme for investors.

“Commercial Paper” or “CP” means an unconditional promise by an Issuer/Promoter to pay to the order of an investor, a certain sum at a future date.

The Series III and IV Commercial Paper Issuance were announced by the arranger, Chapel Hill Denham Advisory Limited.

According to the telco, proceeds from the Offer will be used for working capital and general corporate purposes of the company.

The minimum subscription for an investor is N1 million and can go up to N100 billion. The tenor of the III series is 180 days while the IV series will last 270 days.

 The Offer is scheduled to close on Wednesday, March 17, 2021.

Benefits for investors

MTN Nigeria is undoubtedly the undisputed telecoms market leader in Nigeria. According to the Company, it has 76.5 million mobile subscribers, 32.6 million active data users, and its revenue covers almost 50% of the industry. This makes the company well-positioned for investment.

It explained that it has a great profit pool and unmatched investments in its infrastructure – the most expansive 2G, 3G, and 4G network, the largest fibre network (c. 29,500km) spanning across Nigeria.

MTN Nigeria touted that mobile voice and data subscription continue to be a major part of consumer spending and despite the prevailing COVID-19 environment, it continues to sustainably strengthen its subscriber base.

According to a corporate rating issued by Agusto & Co., the company has strong financial performance with record revenue in excess of N1 trillion (largest revenue by a listed corporate).

MTN added that it has stable and healthy operating profit metrics (c. +50% EBITDA margin), comfortably low leverage (0.4x Net Debt/EBITDA) predominantly in local currency and strong fee cash flow.

In conclusion

Nigeria offers an attractive proposition for telecom investors as Africa’s largest economy and most populous country. MTN, being the market leader, is poised as the best bet for investors.

MTN Group has over 251 million subscribers in 21 countries (including the Middle East).

Asides from its strong financial background, the company’s beneficial relationship with MTN Group – Africa’s leading cellular telecommunications company gives strong investor confidence.