Airtel hits global bond market with $1-bn issue to fund capex

Airtel has appointed 6 merchant bankers for the deal, which include BofA-ML, Barclays, Deutsche Bank, HSBC and Standard Chartered among others

Bharti Airtel approached the global debt market on Wednesday to raise up to $1 billion in a 10-year bond sale programme.

Bharti's $1-billion Reg S bond is in the market. The source said the Sunil Bharti-promoted company has given an initial price forecast of 220 basis points (bps) above the US treasury, which is trading at around 2.60 per cent.

The company has appointed six merchant bankers for the deal, which include Bank of America-Merrill Lynch, Barclays, Deutsche Bank, HSBC and Standard Chartered among others.

This marks the first major bond sale by a domestic private sector corporate in the financial year. Last year the heavily-indebted company had hit the forex debt market thrice, raising more than $2.5 billion. Earlier in the day, in an exchange filing, the Delhi-based company said it would be raising funds from the international market.

“Bharti Airtel has approached investors for issuance of debt instruments in the form of dollar-denominated senior unsecured notes,” it said in a filing to the BSE.

The notes are rated BBB- by Fitch, BBB- by S&P and Baa3 by Moody’s.

“The proceeds will be used for capital expenditure in compliance with end-use guidelines set forth in the master circular by the Reserve Bank of India and all laws and regulations of India applicable to the company,” Airtel said in the filing, adding the instrument would be listed on the Singapore exchange. The company had posted a 30.5 per cent rise in net profit at Rs 1,255 crore for the March quarter, driven by data revenue. But its Africa business continued to bleed, with increasing losses and declining revenue.

For the March quarter, its Africa business loss increased to Rs 1,138 crore from Rs 645 crore in the same quarter last year, while for FY15, the losses stood at Rs  3,548 crore, against Rs 1,855 crore for FY14.