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Telecoms giant MTN will be issuing two tranches of bonds ranging from four to 10 year tenors to raise new funds, about N200 billion, to partly finance its network expansion.
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Bonds are investment securities allowing investor lend money to a company or a government for an agreed period of time in exchange for regular interest payments. At the maturity date, the principal amount is paid back in full or risk default.
The opening date for the new bond issue is yet to be decided but in those with knowledge of the plans sources said the new capital raising would be undertaken through the book-building method.
This is an auction-like, bid-based process that usually targets investment firms and high networth investors.
The network operator said the fresh fund will help finance capital expenditure, particularly network expansion, as well as “working capital management and general corporate purpose.”
The deal will allow MTN to offer a tranche of four-year bonds and another tranche of 10-year bonds; all as fixed rate senior unsecured bonds under its new N200 billion bond issuance programme.
The bond will be offered at a par value of N1000 with minimum subscription of 10000 or N10 million. The new bonds are expected to be listed on the FMDQ Securities Exchange Limited after the completion of the issuance.
With over 60 million subscribers, MTN is the leading mobile operator in Nigeria with a market share of 37.9 percent as at February 2022.
