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As interest rates rise, IHS Towers borrows $600m at 3.75%

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IHS Towers is borrowing US$600 million for three years, though it expects to use only $370 million of it.

The company says most of the money will be used to repay a $280 million bridge facility that is due to mature in February 2023 plus part of a $76 million Nigerian credit facility that is due to mature in September 2024.

IHS Towers has nearly 40,000 towers across its 11 markets, including Brazil, Cameroon, Colombia, Côte d’Ivoire, Egypt, Kuwait, Nigeria, Peru, Rwanda, South Africa and Zambia.

This deal is called a “bullet-term loan”, common in commercial real estate, meaning IHS makes just interest payments during the term, and then pays all the money back at the end of the term.

The terms of the loan carry an interest rate of 3.75% plus three-month term secured overnight financing rate (SOFR) and credit adjustment spread (CAS).

The bookrunner initial mandated lead arrangers of this transaction were Absa, Citi, Rand Merchant Bank and Standard Chartered Bank, said IHS in its announcement.

The tower company said the remaining proceeds will initially be left undrawn and can be used for general corporate purposes.

In September 2022, IHS Towers also successfully extended the termination date of its $270 million revolving credit facility, for a period of two years after its original termination date, to the end of March 2025. The commitments available under this facility currently remain undrawn.

Last month the company announced plans to extend its Project Green in order to reduce its carbon footprint at a cost of $214 million in capital expenditure between now and 2024.