MTN Nigeria receives facility from 24 Banks

MTN Nigeria, yesterday scooped a medium term financing deal of about N470 billion from 24 banks Including 17 local financial institutions and five foreign banks.The local lenders led by Zenith Bank, which pooled N55 billion (about $367m) FCMB N15 billion, while GTB also pooled N40 billion. Similarly, UBA and Fidelity Bank contributed N25 billion and N26.2 billion receptively. Other banks that participated in the deal include Access with N35 billion, Diamond N5 billion, Citibank N5 billion, Ecobank N15 billion, First Bank N40 billion, FSDH N3 billion, Keystone N5 billion, Mainstreet N5 billion, Rand Merchant N3 billion. Also Stanbic IBTC contributed N15 billion, Standard Chartered N7 billion and Union Bank N20 billion, making up a total of N329.25 billion. Under this funding arrangement, the local currency medium term facility of N329.25bn is  arranged  by a syndication of 17 banks with Zenith Bank as  mandated lead arranger having the highest allocation of N55 billion (about $366.67). The foreign banks included one Chinese bank, two from South Africa and others from Europe. The funding ratio of loan is 70 per cent from the local banks and 30 per cent from the foreign ones with a seven- year repayment plan.MTN Nigeria explained that the reason for this strategic funding ratio was to guard against unstable foreign exchange volatility that may affect its operations.Speaking shortly after the signing ceremony, the Chief Executive Officer, MTN Nigeria, Brett Goshen disclosed how expensive local financing could be, saying, “Ordinarily, local financing is usually costly but we deliberately structured the ratio against the unstable forex between naira and dollar to minimize risk.“We may predict what the forex may be between one and two years but definitely not in seven years.” He added that, the funding was another successful landmark in the history of the telecoms and banking industry in collaboration with international financial institutions.He maintained that MTN has built a track record of successful partnerships together, saying,” our $395 million arrangement in 2003 was the largest African telecoms funding deal to close outside of South Africa.In 2007, MTN Nigeria again partnered with various local and international financial institutions to raise $2 billion to fund our rapidly expanding operations, it was again regarded as the largest loan syndication to any individual telecommunication company in Africa.

Culled from Sunnewsonline