Bharti Airtel to raise more than $500 million by selling bonds

Mumbai: Bharti Airtel Ltd, India’s largest mobile phone operator, on Wednesday said that it seeks to raise more than $500 million by selling bonds to investors across the world. The issue could touch $1 billion, a banker involved in the deal said.

In a notice to local stock exchanges, Bharti said it will issue the bonds to raise money for its capital expenditure. The issue would be a “benchmark” one with a tenor of 10 years and has been rated by rating agencies Fitch Inc., Standard and Poor’s (S&P) and Moody’s Inc., the company said.

S&P has issued a BBB rating to the issue. In a note issued on Wednesday, the agency said it expects that the proceeds of the issue will help Bharti deleverage its balance sheet.

“Bharti expects to primarily use part of the proceeds of the proposed notes towards capital expenditure, which we believe will enable the company to apply its business cash flows towards deleveraging,” S&P said.

Six banks are managing the issue—Barclays Plc, Hongkong and Shanghai Banking Corp. Ltd (HSBC), Deutsche Bank AG, Bank of America-Merrill Lynch, BNP Paribas SA and Standard Chartered Plc.

“This issue is a 144 A which means that investors in the US can also buy the bonds. It is likely that the issue will cross $1 billion as demand will only pick up once the European markets open. The issue will close late tonight India time,” said the banker involved in the deal cited above.

Bharti Airtel has been among the few Indian companies that have been a regular in the overseas bond market.

In May 2014, the company raised money in dual currencies, selling dollar bonds worth $1 billion and euro bonds worth $750 million in one of the largest single tranche of bond issues from India.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.