Airtel Africa Completes Early Redemption of $505 Million Senior Secured Notes
“The settlement includes all unpaid accrued interest up to the redemption date of March 7, 2022. One-time costs of $17.6 million for the applicable premium will be recorded in finance charges, while the Group will save a total of $26.5 million on future interest payments from the early redemption,” said part of the corporate disclosure by Airtel Africa.
Airtel Africa had issued the 5.125% Senior Secured Notes to raise capital for operational purposes. He did not explain why he chose to redeem it earlier than the scheduled maturity date.
The company, however, explained that it was committed to strengthening its balance sheet by deleveraging and reducing its exposure to dollar debt. The telecommunications company further explained that it has so far managed to reduce its HoldCo (USD) debt by $1.7 billion and improve its leverage ratio.
Additionally, following the prepayment of the senior secured loans, Airtel Africa has only $1 billion of obligations remaining to be repaid. The remaining bonds will mature in May 2024.
Investopedia defines senior secure ratings as “bonds that must be repaid before most other debts, in the event of the issuer’s bankruptcy.”
Note that Airtel Africa Plc is one of the largest telecommunications service providers in Africa. The company has a presence in 14 African countries, including Nigeria, where it launched an initial public offering (IPO) in June 2019, becoming the second telecommunications company to do so on the Nigerian stock exchange.
On January 31, 2022, Business Insider Africa reported that the company had become the most capitalized company in Nigeria, overtaking Dangote Cement Plc, majority owned by Africa’s richest man, Aliko Dangote.
Airtel Africa closed today’s trading on the Nigerian Stock Exchange with a share price of $3.03 (N1,260) per share.