Victor Ezeja
InfraCredit, an infrastructure credit guarantee institution, has announced its guarantee of Pan African Towers (PAT) Limited Digital Infra Fund N10 billion bond issuance.
The infrastructure credit scheme code-named PAT Digital Infra Fund SPV PLC is a 10-Year Series I senior guaranteed fixed rate bonds due by 2032 (the “PAT Series I Bonds” or “Bonds”) under the N50 billion Debt Issuance Programme.
PAT Digital Infra Fund SPV PLC is a special purpose funding vehicle established by PAT as part of the company’s capital-raising plan.
PAT is a digital telecommunications infrastructure company and wireless service facilitator, offering colocation and infrastructure sharing services to mobile network operators and Internet service providers.
The telecom company’s remarkable growth over the past four years of operation has been underpinned by its cost efficiency leadership and service quality philosophy. With over 1,000 long lease tenancy contracts from leading telecommunications service providers, especially tier-1 players like MTN, Airtel and 9mobile, PAT is the third largest and the only major local infrastructure service provider and wireless service facilitator in the Nigerian telecommunications subsector.
PAT is a first-time issuer in the debt capital markets. With the support of InfraCredit’s guarantee, the PAT Series I Bonds were accorded a ‘AAA’ long term credit rating by Agusto and Co. and GCR, reflecting the high degree of creditworthiness and the robust quality of the Bonds. The Bond issue was oversubscribed by 127 per cent by ten institutional investors, including the domestic pension funds and insurance companies.
The Bond proceeds will be used to finance the roll-out of new environmentally friendly tower sites to enhance telecommunication coverage and service quality, especially in underserved communities. Additionally, the company aims to apply some of the proceeds in procurement of renewable energy sources as way of keying into the decarbonisation agenda to mitigate the impact of global warming and climate change.
The Bonds were priced off the yield on the comparable FGN Sovereign Bonds, providing a unique opportunity for pension fund managers to diversify their portfolios with “AAA”-rated, risk-adjusted return yielding assets.
In a statement, the Chief Executive Officer of InfraCredit, Chinua Azubike, expressed the organisation’s strong support for PAT’s infrastructure financing scheme.
He said, “We are pleased to have supported Pan African Towers, Nigeria’s fast growing indigenous digital infrastructure service provider’s first naira issuance in the local debt capital markets for expansion and growth that will also reduce its carbon emissions.
“We are also proud to support the ambitions of Nigeria’s National Development Plan to facilitate the formation of private capital investments in digital infrastructure that will accelerate job creation and local economic growth. The need for digital connectivity is more essential than ever as Nigeria accounts for over 27 per cent of all Internet usage in Africa, and much of this Internet access are powered by telecommunication infrastructure service providers like PAT.
“This transaction strongly demonstrates the especially important role of the local pension funds in the allocation of long-term domestic credit to the private sector for sustainable development,” Azubuike stated.
Chairman of Pan African Towers Limited, Mr. Wole Adeleke stated that the company aims to be the number one wholly indigenous owned digital telecommunications infrastructure and wireless service facilitator in Nigeria.
Adeleke said, “In the last 3 years that we commenced business, we have demonstrated capacity to achieve faster growth in the number of our rental assets, with solid top and bottom-line performance supported by long-term contracts with leading market leaders in mobile telecommunication and Internet services in Nigeria. And we are pleased that InfraCredit was able to provide full credit enhancement for this debut Bond Issuance programme.
“We are very passionate about the environment and part of the proceeds from the Bond Issue will be utilized to green our network of Build-to-Suite Towers to reduce carbon emission; an objective that aligns with that of our major customers.”
FCMB Capital Markets Limited acted as Lead Issuing House/Bookrunner and Chapel Hill Denham Advisory Limited, FSL Securities Limited and Vetiva Capital Management Limited acted as Joint Issuing Houses and Bookrunners for the transaction.
Pan African Towers Limited (“PAT”) was licensed 2017 by the Nigerian Communications Commission (“NCC”) to operate as a telecommunications colocation and infrastructure sharing service provider. The company commenced operations in 2018.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
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