Indian giant Bharti Airtel has priced a €750m (US$1bn) euro-denominated bond, the proceeds of which will be used to refinance existing debt.
It is the operator’s first euro bond issuance and the first by an Indian corporate or emerging market telco,…
Indian giant Bharti Airtel has priced a €750m (US$1bn) euro-denominated bond, the proceeds of which will be used to refinance existing debt.
It is the operator’s first euro bond issuance and the first by an Indian corporate or emerging market telco, it said in a statement.
The five-year notes carry a 4% coupon and priced at 99.756 to yield 4.055%, equivalent to a spread of 300 basis points over mid-swaps.
In a statement Bharti said the issue was oversubscribed more than five times and generated an order book of €3.8bn (US$5.2bn). It added that the transaction priced well inside of a new five-year US dollar level interpolated from the trading levels of Bharti’s outstanding US dollar bonds.
Harjeet Kohli, Bharti’s group treasurer, said: “It is heartening to be the first Indian corporate to access the European [investment grade] credit market. The overwhelming response from investors across Europe for this inaugural issue highlights the strength of our credit.
“This transaction helps us continue to diversify sources of funding and the euro financing also acts as a natural hedge to many of our African businesses where local currency is pegged to euros.”
More than a third of the notes were sold in the UK, 18% in Germany and Austria, about 35% in other European countries and 9% in Asia.
Bharti has mandated Barclays, BNP Paribas, Deutsche Bank, JP Morgan, Standard Chartered and UBS as joint lead managers and joint bookrunners on the offering.
Moody’s rated the notes Baa3 and Fitch assigned BBB-. A Moody’s analyst previously said that its rating is “underpinned by its receipt of strong and growing cash flows from its Indian operations”. However the ratings agency warned that the company was exposed to potentially volatile political and regulatory environments, particularly since it expanded its African operations in 2010.
Bharti is currently looking at a potential sale of its African tower operations to cut its US$9.7bn debt load. Towercos Helios, Eaton, IHS, and American Tower are said to have submitted expressions of interest for some of the 15,000 towers, which have been valued at around US$1.8bn-US$2bn.
