Mobile telecommunications provider MTN has signed a four-year revolving credit facility, worth $250 million, with Standard Bank London and Sumitomo Mitsui Banking Corporation Europe, along with a syndicate of South African and international banks.
The company says the purpose of the new loan is to "term out" an existing $450 million syndicated term loan facility - provided by the mandated arrangers and a syndicate of banks - in July 2001. The loan was used to finance the licence acquisition and initial working capital for MTN`s Nigerian operation.
The original loan, which was to be repaid over two years, only needed to be refinanced to the tune of $250 million, as the company`s Nigerian operation has been performing ahead of expectations and the rest of the group has also displayed continued strong performance.
As such, MTN was able to negotiate much improved terms for the new facility, thus reducing its financing requirement by $200 million.
An MTN spokesman says the support shown by the mandated arrangers, underwriters, managers and participants has been very pleasing and that it indicates the financial market`s continuing confidence in the MTN Group.
He says that market response was extremely positive, with over $440 million in commitments received, representing a 56% oversubscription of the facility amount.
The facility was initially launched at $250 million and was oversubscribed but not increased. It has a final maturity of four years from the signing date of 26 March and carries an interest rate of 1.75% above the London Interbank Offering Rate throughout the life of the facility, which is also an improvement on the rates for the original loan.
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