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MTN Uganda  

 10/19/2009 
Largest ever Ugandan Corporate syndicated loan and a world first in the syndicated loan market.

Kampala, Uganda, 19 October 2009 – Absa Capital, the investment banking division of Absa Bank Limited (“Absa Capital”) as sole Global-Coordinator, together with Barclays Bank of Uganda Limited, KCB Bank Uganda Limited, Stanbic Bank Uganda Limited and Standard Chartered Bank Uganda Limited as Mandated Lead Arrangers and Bookrunners have signed a USD 100 million equivalent multi-tranche, local and foreign currency syndicated term loan and revolving facilities (the “Facilities”) for MTN Uganda Limited. The Facilities were issued under an innovative structure similar to a Medium Term Note Program used for the issuance of bond securities. The structure allows MTN Uganda to enter into USD 150 million equivalent of senior secured facilities on an ongoing basis and is a first in the syndicated loans market.

The Facilities are split between a UGX 118,800,000,000 5-year local currency term loan tranche (USD 60 million equivalent), a USD 20 million 5-year term loan tranche and a UGX 39,600,000,000 5-year revolving credit facility (USD 20 million equivalent).

Standard Chartered Bank was appointed as Global Facility Agent and Security Agent for the MTLP. Africa Legal, the cross-border division of the South African law firm Deneys Reitz, acted as English law lead counsel to the Global-Coordinator and the Mandated Lead Arrangers, together with Ugandan law firm Shonubi, Musoke & Co Advocates as a local counsel. Webber Wentzel, together with local advisors, Kampala Associated Advocates, acted as legal advisors to MTN Uganda.

This is the largest syndicated loan for a Ugandan corporate borrower to date. The facility was well subscribed by 11 domestic, regional and international financial institutions participating in the facility with the following institutions joining the transaction at the general syndication stage: Bank of Africa Uganda Limited; Barclays Bank of Kenya Limited; Citibank Uganda Limited; DFCU Bank Limited; Ecobank Uganda Limited; Orient Bank Limited and United Bank for Africa Uganda Limited.

The innovative structure addresses the need for strong local corporate credits in the Sub-Saharan Africa syndicated loan market to manage their funding needs and avoid frequent refinancing and associated costs as additional debt funding becomes available – allowing corporate issuers to maintain an optimal and efficient capital structure.

MTN Uganda established the Facilities to finance its capital expenditure and working capital requirements and to further develop its banking relationships.

“The loan facility is an indication of the confidence that banks have in our company. It also reflects the confidence that the financial sector has in the Ugandan economy and the prospects of the Ugandan telecommunication sector,” said Nigel Williams, Financial Director of MTN Uganda.

Established in April 1998, MTN Uganda operates both fixed and mobile telephone networks. Since inception, MTN Uganda has grown and continues to be a leading mobile operator in Uganda with a market share of approximately 50%. MTN Uganda is approximately 96% owned by MTN group and approximately 4% owned by Invesco Uganda Limited.
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