“Settlement includes all outstanding accrued interest up to the Redemption date of 7 March 2022. One-off costs of $17.6m for the applicable premium will be recorded within finance costs, while the Group will save an aggregate of $26.5m future interest payments from early redemption,” said some part of the corporate disclosure by Airtel Africa.
Airtel Africa had issued the 5.125% guaranteed senior notes to raise capital for operational purposes. It did not explain why it chose to redeem it earlier than the expected maturity date.
The company did explain, however, that it was committed to strengthening its balance sheet by deleveraging and reducing its dollar debt exposure. The telco further explained that it has so far successfully reduced its HoldCo (USD) debt by $1.7 billion and improved its leverage ratio.
Furthermore, following the early repayment of the senior secured loans, Airtel Africa now has only $1 billion worth of bonds remaining to be repaid. The remaining bonds will mature in May, 2024.
Investopedia defines senior secure notes as “bonds that must be repaid before most other debts, in the event that the issuer declares bankruptcy.”
Note that Airtel Africa Plc is one of Africa’s largest telecom services providers. The company has operations in 14 African countries including Nigeria where it launched an Initial Public Offering (IPO) in June 2019, becoming the second telecom company to do so on the Nigerian Exchange.
On January 31st, 2022, Business Insider Africa reported that the company had become the most capitalised company in Nigeria, overtaking Dangote Cement Plc which is majority-owned by Africa’s richest man, Aliko Dangote.
Airtel Africa closed today’s trading on the Nigerian bourse with a share price of $3.03 (N1,260) per share.