MTN Group: $750m eurobond sale to fund expansion

MTN Group, Africa’s largest wireless operator, planned to raise $750 million (R8 billion) from a debut eurobond sale as it sought to expand in new markets, said people familiar with the matter. MTN held discussions with investors about a $500m-$750m bond sale with a seven to 10-year term, said the people, who asked not to be identified as the talks are private. Chris Maroleng, the spokesman for MTN, declined to comment. MTN is seeking acquisitions while increasing smartphone penetration and boosting data revenue outside South Africa, where competitors and regulators are squeezing profit. It would use its Mauritius unit for the sale to take advantage of tax breaks, according to a sale document. Yields on the debt due July 2017 dropped 17 basis points this year to 8.27 percent on Wednesday, compared to the 71 basis-point average decline for emerging market telecoms firms in JPMorgan indexes. The notes are rated Baa2, the second-lowest investment grade by Moody’s Investors Service, which said MTN would be able to fund investments in Nigeria, South Africa and Iran using cash from operations. Shares fell 1.15 percent to close at R240.60 yesterday. – Bloomberg