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Standard Bank London and Sumitomo Mitsui Banking Corporation Europe, together with a syndicate of leading South African and international banks, have signed a US$250mn facility agreement for a four-year revolving credit facility for Mobile Telephones Networks Holdings (Proprietary) Ltd (MTN).

MTN is a force in the African mobile telecommunications market. At the end of December 2002, its subscriber base exceeded 6.5mn. MTN, solely, or in collaboration with local partners, operates networks in

  • Swaziland, Uganda, Rwanda, Cameroon and Nigeria. The firm intends to extend this “footprint” into other African markets over time.

    Rob Nisbet. group financial director at MTN Group, says: “The purpose of the facility is to “term-out” an existing US$450mn syndicated term loan facility provided by the mandated arrangers and a syndicate of banks in July 2001 which was used to finance the licence acquisition and initial working capital for our Nigerian operation. With the Nigerian operation performing ahead of expectations and continued strong performance throughout MTN group, we have been able to negotiate much improved terms for this new facility and reduce our financing requirement by US$200mn.

    The conclusion of this facility demonstrates that MTN is achieving its strategy of becoming the leading provider of telecommunications services in Africa. The support shown by the mandated arrangers, underwriters, managers and participants has been very pleasing and indicates the financial markets” continuing confidence in MTN group.”

    Adrian Walker, head of syndications financial institutions and corporates at Standard Bank London, adds: “We are delighted with the success of this transaction. Market response was extremely positive with over US$440mn in commitments received, representing a 56% oversubscription of the facility amount. The syndicate represents a true partnership of leading South African banks with international banks active in the African market.”

    Mark Gordon, assistant general manager, Sumitomo Mitsui Banking Corporation Europe, comments: “In a wider context, this facility is important for the continuing development of the South African syndicated loan market. The diversity of the syndicate, coupled with the liquidity provided, augurs well for other South African borrowers seeking to tap the international syndicated loan market.”

    The facility was initially launched at US$250mn and was oversubscribed but not increased. The facility has a final maturity of four years from the signing date of March 26, 2003 and carries an interest rate of Libor + 1.75% throughout the life of the facility.

    The full syndicate is as follows:

    Mandated arrangers: Standard Bank London Limited, Sumitomo Mitsui Banking Corporation Europe Limited

    Underwriters: Standard Finance (Isle of Man) Limited, Sumitomo Mitsui Banking Corporation Europe Limited

    Joint Arrangers: Absa Bank Limited London branch, Barclays Bank Plc, South Africa branch, Commerzbank Akteingesellschaft, Nedcor Trade Services

    Co-arrangers: ABN Amro NV, Johannesburg branch, RMB (Mauritius) Limited

    Managers: Investec Bank (Mauritius), China Construction Bank, Johannesburg branch, Citibank, NA, Standard Chartered Bank, WestLB AG

    Bookrunners: Standard Bank London Limited, Sumitomo Mitsui Banking Corporation Europe Limited

    Documentation agent:            Sumitomo Mitsui Banking Corporation Europe Limited

    Facility agent: Standard Bank London Limited