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Johannesburg - Africa's biggest cell phone operator MTN has raised R6.3bn in South Africa's biggest bond issue to help fund its acquisition of Dubai-based Investcom, it said on Thursday.
MTN said it had issued 4-year bonds worth R5bn and 8-year bonds worth R1.3bn. The notes were priced at spreads of 145 and 150 basis points above the government R153 and R201 benchmarks respectively, MTN said in a statement.
The sale, which marks MTN's maiden foray into the South African bond market, was managed by Deutsche Bank.
MTN said in May it had agreed to buy Investcom for $5.53bn, funding part of the deal in shares and the rest in debt, in a deal that will make it the second-biggest operator in Africa and the Middle East with access to high-growth markets.
The company had said it expected to raise R6bn to R8bn in bonds and told Reuters last week it would fund the balance with syndicated loans.
MTN said on Thursday the total book size exceeded R10bnbut that the company opted to issue just R6.3bn and settle the balance with alternative funding.
Banking sources said on Wednesday MTN had mandated six banks to arrange a $3.5bn syndicated loan to back the Investcom deal, split between a 5-year term loan and a 3-year revolver.
MTN shares slipped 1.24% to R52.62 in early trade on Thursday, lagging a firmer Top-40 index of blue-chip stocks.