South Africa-based MTN Group is looking to raise USD1 billion via two dollar-denominated bonds, the first such issue since 2014 by Africa’s biggest wireless carrier by revenue. The company is launching two USD500 million bonds, at 5.373% (maturing in February 2022) and 6.500% (October 2026) respectively, which will be used for capital expenditure, paying down working capital facilities and for general corporate purposes. The joint book-runners for the issue are Barclays, Bank of America Merrill Lynch, Citi Bank and Standard Bank of South Africa.
MTN Group posted a net loss in the first six months of the year as it weathered what it termed a ‘perfect storm’ arising from the confluence of issues in a number of its major African markets. For example, the first-half results were significantly impacted by MTN Nigeria agreeing to pay a government fine worth USD1.671 billion over three years, whilst the depreciation of local currencies against the US dollar had a substantial impact, and performance was also hit by weak macro-economic conditions affecting consumer spending, the July 2015-to-May 2016 withdrawal of regulatory services from MTN Nigeria, and subscriber disconnections related to mobile user registration requirements, mainly in Nigeria. Group results were also affected by aggressive price competition and the under-performance of MTN South Africa. On the positive side, the company highlighted that MTN Irancell, MTN Ghana and MTN Cyprus delivered strong operational and financial performances for the period.