Bharti Airtel plans to raise up to $1 bn via bond issue to reduce debt

Bharti Airtel has appointed a clutch of bankers as joint bookrunners and joint lead managers to organise a series of fixed income investor meetings

Telecom major Bharti Airtel is planning to raise funds up to $1 billion (about Rs 7,000 crore) via a bond issue by its subsidiary Network i2i, the proceeds of which will be used to reduce debt.

"...offering of USD denominated Guaranteed Subordinated Perpetual Securities by Network i2i Limited (a direct 100 per cent subsidiary of Bharti Airtel) expected to be rated BB by both S&P and Fitch may follow, subject to market conditions," Bharti Airtel said in a regulatory filing.

Bharti Airtel has appointed a clutch of bankers including BofA Merrill Lynch, Barclays, BNP Paribas, Citigroup, HSBC, J P Morgan and Standard Chartered Bank as joint bookrunners and joint lead managers to organise a series of fixed income investor meetings and calls across Asia, Europe and the US starting Wednesday, it added.

Sources said that the fundraising is likely to be in range of $750 million to $1 billion, and the final figure will be arrived at based on the market response.

The proceeds from the issue will be utilised for pruning debt of Bharti Airtel. Bharti Airtel's debt stood at Rs 1.16 lakh crore as in June 2019.

Meanwhile, S&P Global Ratings has said it expects Bharti Airtel's leverage to remain elevated over the next six to nine months, but improve gradually due to reduced capital spending and increasing stability in its India mobile operations.

"We assess Network i2i Ltd's proposed USD 1 billion subordinated perpetual securities (PERPS) as having intermediate equity content. The PERPS are guaranteed by Bharti. We estimate the issuance will improve the India-based telecoms operator's FFO-to-debt ratio (funds from operations to debt ratio) by about 50 basis points," S&P Global Ratings said.