Airtel raises 750 mn euro in bonds;offer highly oversubscribed

Country's largest mobile operator Bharti Airtel today said it has raised Euro 750 million (about Rs 6,350 crore) in the first such bond issue by an Indian corporate and received bids worth Euro 3.8 billion.

The company raised the money at a coupon rate of 4.05% for the five-year paper and will use the proceeds to refinance its existing debt. The coupon rate is the yield paid by a fixed income security.

"...Its wholly-owned subsidiary Bharti Airtel International (Netherlands) BV has priced EUR 750 Million 4% guaranteed senior notes due 2018. The notes will be fully and unconditionally guaranteed by Bharti Airtel," the company said in a statement.

Merchant bankers had last week said the company is mulling to raise over $1 billion through bond sales, ahead of the spectrum auction slated next month.

Bharti Airtel today said the notes attracted huge investor interest with an order-book aggregating over Euro 3.8 billion from high quality investor accounts.

"The notes have been priced at 300 basis points over the 5-year EURO Mid Swap with a fixed coupon of 4% per annum to yield 4.055%," it said.

This is the third bond issue by the private telecom operator this calendar year. Roadshows for the issue were held in London, Paris, Amsterdam and Frankfurt last week.

In March this year, the company had raised $1.5 billion in overseas debt in two tranches.

In terms of geographic distribution, the notes were distributed 38% in the UK, 18% in Germany and Austria, 35% collectively in France, Switzerland, Scandinavia and Netherlands and other European countries and 9% in Asia.

"The notes were distributed 77% to fund managers, 9% to SSA/insurance, 9% to private banks and 5% to banks," it said.

"This transaction helps us continue to diversify sources of funding and the EUR financing also acts as a natural hedge to many of our African businesses where local currency is pegged to Euros," Bharti Group Treasurer Harjeet Kohli said.

Barclays, BNP, DB, JP Morgan, Standard Chartered and UBS acted as joint bookrunners and joint lead managers on the offering.

This is the third major bond sale by an India firm after the May 24 tapering talk by the US Fed, which spiked interest rates in western markets. The other two have been HDFC Bank's $500 million in October and ICICI Bank's $750 million last month.