Fitch assigns 'BBB-' rating to Bharti's EUR 250 mn bond issue

Credit rating agency Fitch has assigned 'BBB-' to Bharti Airtel's euro 250 million bond offering.
"Bharti Airtel International (Netherlands) B.V's EUR250m 4 per cent senior unsecured notes due 2018 a rating of 'BBB-'," Fitch said in a statement.
Yesterday, it raised 250 million euros through the notes.
The notes are unconditionally and irrevocably guaranteed by Bharti Airtel and are therefore rated at the same level as Bharti's foreign-currency senior unsecured rating of 'BBB-', it added.
The 'BBB' ratings indicate that expectations of default risk are currently low and the capacity for payment of financial commitments is considered adequate but adverse business or economic conditions are more likely to impair this capacity. With negative outlook added to this rating, this means the ratings can be downgraded.

Bharti will use all the proceeds from the notes issue to refinance its existing debt which at the end of September 30, 2013 stood at Rs 60,877 crore.

"We expect Bharti's financial year 2014 operating EBITDA margin to remain resilient at 31 per cent as the competitive landscape for its Indian operations improves and the company gains market share in its African operations," Fitch said.'
Airtel financial results for third quarter ending December 31, 2013 are due on January 29.
The rating agency said that it expects Airtel's Indian operations profitability to improve as industry over-capacity falls following the exit or contraction by smaller operators.