Airtel Africa Pays US$505 Million In Guaranteed Senior Notes

Airtel Africa announced that it has redeemed its payment of US $505 million in guaranteed senior notes to its bondholders and creditors.

The telecommunication giant, which is worth more than N4.7 trillion by market valuation, said that the payment is a follow-up to an earlier press statement released on February 4, 2022, where it promised to fulfill its debt obligation to the listed category of bondholders.

In its statement, the company said, "Today confirms that it has completed the early repayment of its c. $505m 5.125% Guaranteed Senior Notes, originally due in March 2023, using cash balances available at group level."

"Settlement includes all outstanding accrued interest up to the redemption date of March 7, 2022.

"One-off costs of c.$17.6m for the applicable premium will be recorded within finance costs, while the Group will save an aggregate of c.$26.5m future interest payments from early redemption."

"Since the time of the IPO in June 2019, Airtel Africa has successfully pursued a strategy of strengthening its balance sheet through both deleveraging. and reducing its US dollar debt exposure."

"Over this period, the Group has reduced its USD HoldCo debt by c. $1.7 billion and improved its leverage ratio to 1.4x net debt to underlying EBITDA at December 2021.

"Following this early repayment of senior notes, the group has $1 billion of bonds remaining at holdco level, due in May 2024."

For those who may not understand what guaranteed senior notes are, Investopedia defines a guaranteed senior note as bonds that must be repaid before most other debts are paid in the event that the issuer declares bankruptcy.

That makes senior notes more secure than other bonds.

They are some of the most secure fixed income investment options for institutional and retail investors.

The safety of this type of investment attracts a lower interest rate than any of the different classes of bonds or fixed income assets.

And because it doesn’t attract coupon rates or interest rates similar to other bond classes, its maturity dates are usually shorter.