Research Update: South Africa-Based MTN Group Ltd. 'BB+' Rating Placed On CreditWatch Negative

The Central Bank of Nigeria (CBN) has alleged improper dividend repatriations by MTN Nigeria Communications Ltd. (MTN Nigeria) and requested that $8.1 billion be returned to the CBN, while the Nigeria Attorney General has alleged unpaid taxes on foreign payments and imports, and requested that approximately $2.0 billion in relation to these taxes be paid to the Federal Government of Nigeria. MTN Nigeria represented around 30% of EBITDA for its parent MTN Group Ltd. in 2017, and is a material contributor to revenue growth and margins. The recent government allegations indicate, in our view, increased risk to MTN from its exposure to Nigeria that was not fully captured in our existing assessment of MTN. Therefore, we are revising the stand-alone

...+ The Central Bank of Nigeria (CBN) has alleged improper dividend repatriations by MTN Nigeria Communications Ltd. (MTN Nigeria) and requested that $8.1 billion be returned to the CBN, while the Nigeria Attorney General has alleged unpaid taxes on foreign payments and imports, and requested that approximately $2.0 billion in relation to these taxes be paid to the Federal Government of Nigeria. + MTN Nigeria represented around 30% of EBITDA for its parent MTN Group Ltd. in 2017, and is a material contributor to revenue growth and margins. The recent government allegations indicate, in our view, increased risk to MTN from its exposure to Nigeria that was not fully captured in our existing assessment of MTN. + Therefore, we are revising the stand-alone credit profiles of MTN Group Ltd. and Mobile Telephone Networks Holdings Ltd. to '##+' from '###-' and placing the '##+' long-term ratings on CreditWatch negative. + We could lower the ratings by one or more notches if we believe that weaker...

Research Update