Bharti Airtel raises $1.25 bn through overseas bonds

Bharti Airtel Ltd has raised $1.25 billion overseas by selling senior bonds and perpetual bonds, in the largest fundraising by any Indian investment grade issuer since January 2019, it said on Thursday.

Bharti Airtel priced the senior 10.25-year bonds of $750 million at a yield of 187.5 basis points (bps) for an implied coupon of 3.25%, while its wholly-owned subsidiary Network i2i Ltd priced $500 million worth guaranteed subordinated perpetual 5.25-year bonds at a coupon of 3.975%.

“This is the lowest yield on 10-year and perpetual bonds for Bharti Airtel,” the telco said.

The telco said it received orders from 92 accounts for senior bonds and 97 accounts for perpetual bonds. The order book is “very well distributed” by region with more than 30% from Asia Pacific, more than 45% from Europe, West Asia and Africa, and the remaining from the US, it said.

The offering was significantly oversubscribed with strong demand from several marquee Asian, European and American funds, the company said. “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 Airtel to meet its pricing as well as size objectives,” it said.

Barclays, BNP Paribas, BofA Securities, Citigroup, HSBC, JPMorgan, and Standard Chartered Bank were joint lead managers and joint book-runners for the fundraising, while DBS Bank Ltd and SMBC Nikko were co-managers.

“The strong reception of both our senior and perpetual bonds by the high quality global investor community reflects its confidence in our business and credit,” said Ashish Sardana, group treasurer, Bharti Airtel.

The fundraising will further support Airtel’s capital structure, Sardana said.

In 2021, Indian companies have been aggressively raising foreign debt through bonds, looking to take advantage of the liquidity and low rates.

Private firms such as Adani Ports and SEZ Ltd, and Continuum Green Energy Ltd and state-run entities such as SBI, Export Import Bank of India, and Power Finance Corp. have mobilized funds through the offshore debt capital market this year. Others such as UltraTech Cement Ltd, ReNew Power Pvt. Ltd, and IRB Infrastructure Developers Ltd raised debt through overseas bonds earlier this month.