Telecoms giant Bharti Airtel has priced a dual currency issuance of senior notes amounting to US$2bn, with proceeds to be used for debt refinancing.
The transaction comprises US$1bn worth of 5.350% notes due 2024 and €750m (US$1.03bn) in 3.375% notes…
Telecoms giant Bharti Airtel has priced a dual currency issuance of senior notes amounting to US$2bn, with proceeds to be used for debt refinancing.
The transaction comprises US$1bn worth of 5.350% notes due 2024 and €750m (US$1.03bn) in 3.375% notes due 2021.
The US dollar bond priced at 270 bps over 10 year treasury with an annual fixed coupon of 5.350% to yield 5.361%. The order book was 8 times oversubscribed, reaching over US$9.5bn.
The euro notes priced at 225 bps over seven year mid-swaps with a fixed annual coupon of 3.3375% to yield 3.498%. Here again, the order book was oversubscribed 5.3 times, amounting to €4.75bn.
Joint lead managers for the offering were Barclays, Bank of America Merrill Lynch, BNP Paribas, HSBC, JP Morgan and Standard Chartered.
The transaction marks the first-ever dual currency issuance by an Asian telco and the largest fundraising exercise by an Indian issuer, Bharti said.
Proceeds will go towards refinancing its existing debt, including the outstanding amount on a US$9bn acquisition facility secured in 2010 to fund its purchase of Zain’s African operations.
Commenting on the bond issues, Bharti Airtel group treasurer Harjeet Kohli said: “We now have US$5bn of bonds outstanding across five, six, seven, nine and 10 years outstanding tenor across US$, € and SFr currency base.”
He added: “Through this as well as the previous bond issuances, all acquisition finance facilities taken for the acquisition of Zain in 2010 have been successfully refinanced well ahead of their tenure.”
Over the past few months, the operator has raised €1bn and SFr350m in bonds, also to reduce its US dollar debt exposure.
As of 31 March 2014, Bharti’s net debt stood at Rs709bn (US$11.9bn).
Earlier this week, Moody’s rated the proposed issue Baa3, while Standard & Poor’s and Fitch both gave a BBB- rating, at the same level as Bharti’s foreign-currency senior unsecured rating.
Explaining the drivers behind the rating, Fitch said although the BBB- rating would not be able to withstand significant debt-funded acquisitions or higher-than-expected regulatory costs, it expects the company to benefit from less harsh competition in the near future.
