Investors in the securities market have lent MTN Nigeria N125 billion, a corporate document has notified the company’s shareholders and the investing public.
On Tuesday, Ripples Nigeria obtained the document dated March 6 2023. It was learnt that the fund was raised through the issuance of commercial paper.
Commercial paper is an interest-bearing promissory note exchanged for capital. It is a credit instrument or a channel to obtain loans from the securities market without approaching the bank.
The commercial paper is issued by a corporate organisation in need of funds for short-term financial obligations, which include; working capital, and refinancing debt, amongst others.
MTN Nigeria had set out to borrow N100 billion through commercial paper, however, it was oversubscribed, which means there was more demand for it among investors than planned.
As a result, MTN Nigeria raised N125 billion from commercial paper issuance, enabling the company to disburse the fund on short-term working capital and funding requirements.
“MTN Nigeria Communications PLC (MTN Nigeria) hereby notifies Nigerian Exchange Limited and the investing public of the successful completion of its Series 4 & 5 Commercial Paper issuance under its Nl50 billion Commercial Paper Issuance Programme (the CP Issuance).
“MTN Nigeria sought to raise N100 billion, and the transaction was 125% subscribed, with a total of A125 billion raised.
“MTN Nigeria issued 188-day commercial papers at a yield of 11.00% and 267-day commercial papers at a yield of 12.50%. The CP Issuance was completed on 1 March 2023.
“The CP Issuance is part of MTN Nigeria‘s strategy to diversity its funding options. The proceeds will be utilised for its short-term working capital and funding requirements,” the document reads
