More pain as S&P downgrades MTN long-term credit rating to junk
By Gareth van Zyl
Johannesburg – S&P Global has lowered MTN Group's credit rating amid Nigeria's recent downgrade, sparking more challenges for the mobile network in the West African country.
Last month, S&P lowered its long-term ratings on Nigeria to 'B' from 'B+' amid weak growth dynamics in that country. S&P, though, said that the outlook for the Nigerian economy is stable.
But the downgrade further represents increased risk for the MTN Group as Nigeria is the mobile network's biggest operation, said the company in a statement on Monday.
"On review of MTN's ratings, S&P lowered the group's long-term corporate credit rating to 'BB+' from 'BBB-' as well as its South Africa national scale rating to 'zaA+' from 'zaAA', outlook stable," said MTN.
"S&P also lowered its issuer rating on the group's existing senior unsecured debt to 'BB+' from 'BBB-', outlook stable. S&P maintains a cap of two notches above the blended sovereign rating of Nigeria and South Africa which is currently 'BB-'," said the company.
This is just the latest challenge for MTN in Nigeria.
Last month, lawmakers in Nigeria accused MTN of illegally moving around R190bn out of the country.
And last year, Nigerian regulators also fined MTN $3.9bn for failing to disconnect around 5 million unregistered SIM cards.
However, earlier this year MTN agreed to pay a 330 billion naira ($1 billion) fine in cash to the Nigerian government and list its local unit on the country's stock exchange. – Fin24