Friday, December 3, 2021

Bharti Airtel announces successful pricing of $1.25 billion US bond issue

In another swift launch, telecom giant Bharti Airtel has successfully priced its debt fundraise of $1.25 billion through its first-ever dual-tranche dollar bond offering spread across senior and perpetual issuance. As per market experts, this is the largest issuance by any Indian Investment Grade issuer since January 2019.

As per market data, Airtel has priced $750 million of senior 10.25-year bonds at a yield of 10 Year Treasury + 187.5bps for an implied coupon of 3.250%. Further Network i2i Limited, a wholly-owned subsidiary of Airtel priced $500 million in guaranteed subordinated perpetual NC 5.25 year bonds with a coupon of 3.975%. This is the lowest ever yield on 10 year and Perpetual bonds for Bharti Airtel.

As per market data, the Bharti Airtel offering was significantly oversubscribed with very strong demand from several marquee Asian, European and American funds. The peak order book of over $5 bn at the time of final price guidance allowed the pricing to tighten significantly from Initial Price Guidance (IPG) on both tranches and allowed the Company to meet its pricing as well as size objectives.

The senior 10.25-year tranche was launched at IPG of 230bps over 10 year US Treasuries and eventually tightened by 42.5bps to price at 10 year US Treasury + 187.5bps. Similarly, the Perpetual NC 5.25 tightened by 37.5bps from its initial price guidance.

According to Ashish Sardana – Group Treasurer, Bharti Airtel, the strong reception of both senior and perpetual bonds by a high-quality global investor community reflects confidence in the company’s business and credit. “We remain focused on keeping our balance sheet strong and these issuances further bolster our capital structure. We are delighted by the outcome and thank our investors for their continuing support,” Sardana said.


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