Bharti Airtel on Thursday said it has raised $1 billion through issuance of 10-year bonds to international investors. The proceeds will be used for capital expenditure. "...it has successfully priced an issuance of $1,000 million 4.375% senior notes due 2025," Airtel said in a statement.
The company said US dollar notes have been priced at 210 basis points over 10-year US dollar treasury with a fixed coupon of 4.375% per annum to yield 4.462%.
"Total order book of $2 billion – subscribed 2.0X with participation from 160 quality accounts. 80% allocation to mutual funds and insurance companies, with balance to banks," the country's largest telecom firm said.
The company said 66%of bonds are allocated to the US investors, 18 % to Europe and 16 % to Asia investors. "With 66 % bonds allocated to the US investors, this is the highest ever allocation to US investors in any Indian deal, demonstrating the strong investor base Bharti has created for itself in developed markets allowing it to efficiently raise capital from world's leading fixed income investors," the company said.
This fund raising marks the first major bond sale by a domestic private sector corporate in the fiscal. Last year, the company had hit the forex debt market thrice raising more than $2.5 billion.
"With bond issuances of close to $6 billion outstanding post this issue, Bharti now has a well-established credit curve across tenure buckets and currencies," Bharti Airtel Group treasurer Harjeet Kohli said. He added these, along with the availability under our long dated ECB terms signed recently with Chinese banks (CDB and ICBC), significantly elongate the tenor of its financing as also helps larger cash flows at hand. Bank of America-Merrill Lynch, Barclays, billionP Paribas, Deutsche Bank, HSBC and Standard Chartered Bank acted as joint lead managers along with DBS Bank as the co-manager for this offering.