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The largest ever non-natural resources financing in sub-Saharan Africa has closed, according to the transaction’s joint advisers and co-ordinators Standard Bank London (SBL) and Nigeria International Bank (NIB), part of Citigroup. The facility is for MTN Nigeria Communications (MTNN) and involves a US$ 395mn series of senior secured term facilities as part of a US$800mn network rollout project.

The sponsors of the project are MTN International (76.5%), Celtel (16.8%), MCI Ltd (3.7%), IFC (3.0%).

The financing is split into the following pari passu tranches: a N31.13bn (US$250mn) three-year local facility; a US$40mn 4.25-year Standard Corporate and Merchant Bank (SCMB) facility (with political risk insurance from South African ECA Ecicsa); a US$35mn 6.25-year term IFC A loan; a US$20mn 6.25- year DFI facility (from FMO and DEG); a US$50mn seven-year IFC standby facility.

MTNN owns the first GSM licence in Nigeria, which expires in February 9, 2016.

Financing followed implementation of a US$170mn one-year bridge loan put in place by Citigroup and Standard Bank London in January 2002, which was extended by 12 months in January 2003.

The transaction was strongly supported by MTN Holdings from the appointment of Citigroup to provision of a direct agreement, a standby debt facility and detailed documentation negotiations.

The facility was marketed to the seven Nigerian banks providing the bridge loan and about 13 selected additional banks, excluding those associated with MTNN’s competitors.

The naira facility was over 50% oversubscribed leading to an increase of US$50mn in the facility size to US$250mn.

This is the first time Ecicsa has provided political risk insurance only on a debt facility.

Nigeria International Bank (NIB) Limited, part of Citigroup, and Stanbic Bank Nigeria Limited were joint arrangers of the note issuance facility, which was underwritten by 15 Nigerian financial institutions. The facility was priced at 100bp over 30-day Nibor and underwriting fees are up to 100bp per year.

Adrian Wood, MTNN’s managing director says: “The success of the transaction reflects financial market support for Nigeria which has the potential to become the biggest cellular market in Africa. It is also a reflection of confidence in MTNN as a very viable company with impressive long-term growth prospects, especially at this period when the telecoms industry in Nigeria is still at an initial stage of development.”

Lenders’ legal counsel were Norton Rose (English law), Udo Udoma & Belo Osagie (Nigerian law), Maigrot Koenig (Mauritian law) and Bowman Gilfillan (South African law).