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After its successful $1-billion bond issue early this month, Bharti Airtel today hit international debt markets with a follow-on issue to raise more funds at the same coupon rate, sources said.
The issuer is the Bharti's fully-owned subsidiary in the Netherlands (Bharti Airtel International Netherlands), a person with the direct knowledge of the development said.
He, however, did not reveal the issue size of the new sale programme. The person only said the final amount will be fixed based on demand.
He further said that the guidance for final pricing (yields) for the 10-year unsecured senior bond issue is pegged at 1.50% above the US treasury.
Earlier on March 4 Bharti had raised $1 billion through bonds that carried a coupon of 5.125%.
When contacted, a Bharti Airtel spokesperson declined to comment.
The follow-on issue, or "tap" bond issue, is the one that allows an issuer to sell bonds or other short-term debt instruments from past issues. The bonds issued will be at their original face value, maturity and coupon rate, but sold at the current market price, or at slightly higher rate.
A tap issue allows an issuer to avoid certain transaction or legal costs like issuing prospectus, and expedite fund raising process.
The merchant banker further said that Bharti Airtel's original issue is currently trading at around 5% (yield) in the secondary markets.
The only other recent tap bond issue was sold by Reliance Industries March, 2012 when the company raised an additional $500 million, following its $1 billion issue the previous month.
So far in 2013, over half a dozen companies, including RIL, PowerGrid, Tata Com, ICICI Bank, HDFC Bank, Exim Bank, Bharti Airtel and Suzlon Energy, (which is today raising USD650 million to repay its existing foreign debt among others), raised nearly $6 billion from overseas debt market.
Bharti's, which is the largest telco in the country and the fifth largest in the world, the March 4 issue was the largest bond sale by a private corporate this year.
