Bharti Airtel gains on raising $1.25 bln via overseas bonds

Bharti Airtel rose 1.68% to Rs 582.70 after the company said it raised $1.25 billion by issuing first ever dual-tranche US$ bond offering spread across senior and perpetual issuance.

The total debt fund raising of $1.25 billion by the company includes an issue of unsecured senior fixed rate notes of $750 million and $500 million subordinated perpetual securities by Network i2i, a wholly-owned subsidiary of the company.

Bharti Airtel has priced $750 million of senior 10.25 year bonds at a yield of US 10 Year Treasury + 187.5bps for an implied coupon of 3.250%. Simultaneously, Network i2i priced $500 million in guaranteed subordinated perpetual NC 5.25 year bonds with a coupon of 3.975%. This is a lowest every yield on 10 year and perpetual bonds for Bharti Airtel.

The telecom major said that the offering was significantly oversubscribed with very strong demand from several marquee Asian, European and American funds. The peak order book of over $5 billion at the time of final price guidance allowed the pricing to tighten significantly from Initial Price Guidance (IPG) on both tranches and allowed the company to meet its pricing as well as size objectives. The senior 10.25 year tranche was launched at IPG of 230 bps over 10 year US Treasuries and eventually tightened by 42.5 bps to price at 10 year US Treasury + 187.5bps. Similarly, the Perpetual NC 5.25 tightened by 37.5 bps from its initial price guidance.

The company said that the proceeds will be used for capital expenditure, repayment of existing indebtedness and/or any other purpose.

Ashish Sardana - group treasurer, Bharti Airtel said: "The strong reception of both our senior and perpetual bonds by high quality global investor community reflects its confidence in our business and credit. We remain focused on keeping our balance sheet strong and these issuances further bolster our capital structure. We are delighted by the outcome and thank our investors for their continuing support."

On a consolidated basis, the telecom major reported a net profit of Rs 853.60 crore in Q3 FY21 as against net loss of Rs 1,035.30 crore in Q3 FY20. Net sales during the quarter increased by 24.2% year-on-year (Y-o-Y) to Rs 26,517.80 crore.

Bharti Airtel is a global telecommunications company with operations in 18 countries across South Asia and Africa.

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