MTN announces successful upsized SA debt capital markets bond auction
As part of telecommunications group MTN’s ongoing treasury initiatives, Mobile Telephone Networks Holdings (MTNH) accessed the local debt capital market by means of a bond auction seeking R2-billion, with an option to upsize to R2.5-billion.
The initiatives are geared towards managing the company’s debt maturities, maintaining adequate liquidity in the ordinary course of business and improving its debt currency mix.
The notes on offer varied in tenor between three, five and seven years, with a preference for longer dated notes.
The auction, held on September 6, was well subscribed at 2.7x, with the total order book coming in at R5.431-billion, all within or tighter than price guidance.
“This demonstrates a strong appetite and support for the MTN credit from institutional investors and participating banks,” the company said in a statement to shareholders on Friday.
“Given the demand and attractive pricing on offer, MTNH upsized the issuance to R2.565-billion, issuing R540-million, R1.041-billion and R984-million in three-, five- and seven-year notes, respectively,” MTN points out, noting that the settlement date will be September 13.
“The auction has allowed MTN to meaningfully improve our pricing across the curve, lengthen our debt maturity profile and advance our strategic activities of improving our ratio of non-rand to rand denominated debt while at the same time increasing our use of the local debt capital markets.”
MTN’s pro-forma Holdco leverage as at June 30 will remain unchanged at 0.8x, post the settlement.
On the same basis, the ratio of non-rand to rand denominated debt would improve further to 33:67 post this issuance – and the recently reported cash tender offer settlement – compared with the 42:58 ratio reported in MTN’s 2022 interim results.
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