Agusto & Co. hereby assigns an indicative “Aa+” rating to the MTN Nigeria Communications Plc’s up to ₦100 billion Series 1 Bond
The rating expires on 30-06-23
Agusto & Co. hereby assigns an indicative “Aa+” rating to the MTN Nigeria Communications Plc’s (“MTN Nigeria”, “MTN”, “Issuer” or “the Company”) up to ₦100 billion Series 1 4-Year Senior Unsecured Fixed Rate (Tranche A) Bonds Due 2026 & 10-Year Senior Unsecured Fixed Rate (Tranche B) Bonds Due 2032 under the ₦200 Billion Bond Issuance Programme. The assigned Issue rating mirrors the standalone rating of the Issuer, as the bonds are senior unsecured debt and rank pari passu with other senior debts of the Company. MTN Nigeria Communications Plc has a “Aa+” rating by Agusto & Co, which will expire on 30 June 2023. In the financial year ended 31 December 2021 (FYE 2021) and the three months (unaudited) ended 31 March 2022 (Q1’2022), MTN Nigeria’s financial condition was characterized by very good and sustainable profitability levels, strong cash flow position, improving leverage metrics, good corporate governance framework, and an experienced and qualified management team. Agusto & Co. notes positively MTNN’s strong leadership position in the Nigerian telecommunications industry, a broad range of spectrum licenses, extensive network coverage, expanding distribution channels, large and growing subscriber base and resilient internal business operations strategy.
MTN Nigeria plans to issue up to ₦100 billion in Q3’2022 as a Series 1 issuance under the ₦200 Billion Bond Issuance Programme to fund network expansion and 5G rollout (60%), general corporate purposes (20%) and meet working capital requirements (20%). The Series 1 bond will be issued in two tranches. The Series 1 bonds are direct, unsecured, senior and unconditional obligations of the Issuer and shall rank pari-passu among themselves and equally with other existing obligations of the Issuer present and future except for obligations mandatorily preferred by law. In addition, MTN Nigeria unconditionally and irrevocably guarantees to pay the coupon and redeem the principal amount from its operating cash flow. In line with the Series 1 Tranches A & B Trust Deeds, a Payment Account (PA) shall be opened by the Issuer under the control and management of the Bond Trustees for the benefit of the Bondholders. As long as the bonds remain outstanding, the Issuer will be required to fund the PA with the amount required to meet its payment obligations comprising coupon and principal due no later than 10 business days before the next payment date.
The opinions expressed in this rating release do not represent investment or other advice and should therefore not be construed as such. Visit www.agusto.com for further information.