Bharti Airtel raises $1.25 billion through various debt instruments

The fund-raising is part of the company’s preparation for the upcoming spectrum auctions, where the exchequer hopes to raise Rs 3.92 trillion.
Bharti Airtel on Thursday said it has raised funds to the tune of $1.25 billion via various debt instruments.


It is learnt that a clutch of global investors, including Goldman Sachs Asset Management, Fidelity, and BlackRock, have evinced an interest in the company’s overseas bonds.


The fund-raising is part of the company’s preparation for the upcoming spectrum auctions, where the exchequer hopes to raise Rs 3.92 trillion.


Airtel said this is the first-ever dual-tranche US dollar bond issued by the company, spread across senior and perpetual issuances. “This is the largest issuance by any Indian investment grade issuer since January 2019,” Airtel said in a statement.


The company said the order book was oversubscribed 3x on final pricing, with the peak order book of $5 billion at the time for final price guidance.


Airtel has priced $750 million of senior 10.25-year bonds at a yield of US 10-year treasury plus 187.5-basis points (bps) for an implied coupon of 3.25 per cent.


Simultaneously, Bharti Airtel’s subsidiary Network i2i priced $500 million in guaranteed subordinated perpetual NC 5.25-year bonds with a coupon of 3.97 per cent.


This is the lowest-ever yield on 10-year and perpetual bonds for Bharti Airtel.


“The offering was significantly oversubscribed with very strong demand from several marquee Asian, European, and American funds,” the statement said.


The senior 10.25-year tranche was launched at an initial price guidance of 230 bps over 10-year US treasuries and eventually tightened by 42.5 bps to price at 10-year US treasury plus 187.5 bps.


“Similarly, the perpetual NC 5.25 tightened by 37.5 bps from its initial price guidance,” the statement said.


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

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