MTN to sell USD309 million Rand denominated bond

MTN Group

MTN Group, Africa’s largest mobile carrier by subscriber base will be selling a Rand (ZAR) denominated bond, first in the last seven years according to its record.

The bond is estimated to have the value of ZAR4 billion approximately USD309 million. Gimme Credit LLC, an independent provider of corporate bond analysis and investment told Bloomberg that:

“The company will have to raise funds to maintain a comfortable cash level this year. There is still appetite for their debt.”

Gimme Credit said MTN Group will be opting for Rand denominated bonds as ratings on its dollar bonds have gone bad. Earlier this week, Moody’s said in its updated rating opinion on MTN Group that its ability to sell more debt will further wane as its Nigerian unit continues to turn in less cash.

Moody’s however advised that should the group get some cash from Nigeria, it might have a more positive rating on its current notes.

The company has to control its debt level which has soared by 64 percent to ZAR52 billion in 2016. The company spent huge amount of cash to upgrade its infrastructure as well as pay part of the record NGN330 billion fine imposed on the company for regulatory infractions.

However, MTN Group not have a leash on its debt level, it will get axed by Moody’s and other credit ratings agency who are concerned about the prospect of its revenue in its key markets.

The company is already under pressure to regain its profitable position which went into a first ever full year loss as disclosed in its 2016.