Rating Release

Agusto & Co. affirms the “Aa+’’ rating assigned to MTN Nigeria Communications PLC’s ₦89.99 Billion 10-Year 12.75% Fixed Rate Senior Unsecured Series II Bond Due 2031 Under the ₦200 Billion Bond Issuance Programme, with a stable outlook 

The rating expires on 30 September 2025. 

Agusto & Co. hereby affirms the “Aa+” rating assigned to MTN Nigeria Communications PLC’s (“MTN Nigeria”, the “Issuer” or “the Company”) ₦89.99 Billion 10-Year 12.75% Fixed Rate Senior Unsecured Series II Bond Due 2031 (“Series II Bond”, “the Issue” or “the Bond”) under its ₦200 Billion Bond Issuance Programme. The Issue rating mirrors the credit quality of MTN Nigeria Communications PLC, rated “Aa+” by Agusto & Co and expiring 30 June 2025, as its operating cash flows have been pledged as the sole source of repaying the Bond obligations (coupon and principal). MTN Nigeria Communications PLC’s rating reflects its strong cash flow and liquidity profiles, upheld by its favourable trade terms with customers and suppliers and moderate leverage metrics. MTN Nigeria’s rating also considers its dominant position in the domestic telecoms space, sustained investments in its network infrastructure, rising broadband penetration, a broad range of spectrum licenses supporting its ongoing 4G/5G expansion initiatives and a stable, qualified and experienced management team. This is in addition to the Nigerian Communication Commission’s (NCC) recently approved 50% tariff increase on telecom services (voice, data and SMS) in January 2025, which we expect to positively impact the Issuer’s overall performance in the near term. Notwithstanding, these rating positives are constrained by MTN Nigeria’s negative shareholders’ funds and weakened profitability metrics owing to the significant post-tax losses reported in 2023 and Q3’2024, as well as the adverse impact of prevailing macroeconomic headwinds on its business profile.

In November 2021, MTN Nigeria Communications PLC issued ₦89.99 billion Ten-Year 12.75% Senior Unsecured Fixed-Rate Bond Due 2031 as part of a Series II issuance under its ₦200 Billion Bond Issuance Programme. The Series II Bond is a senior, direct, unsecured debt and ranks equally with other senior debts of the Issuer. The net proceeds were utilised to part-liquidate existing loan obligations and to support MTN Nigeria’s network expansion projects. The Series II Bond attracts a 12.75% fixed coupon rate payable semi-annually over the ten-year tenor, while the Bond principal will be amortised over three (3) equal annual instalments (starting from 4 November 2029) upon the expiration of the seven-year moratorium.