Bharti Airtel hits overseas debt market again, sells $500m bonds at 5.13%
Mumbai: Telecom major Bharti Airtel Monday raised USD 500 million (around Rs 2,700 crore) from international markets in a benchmark follow-on bond sale issue, one of the merchant bankers StanChart said.
The issuer is the Bharti's fully-owned subsidiary in the Netherlands (Bharti Airtel International Netherlands), and comes within a month of the company raising USD 1 billion in a 10-year bond sale.
"Bharti's Netherlands' subsidiary today successfully sold USD 500 million worth bonds in a tap sale, which will mature on March 11, 2023, at 100.625. The bonds will get a yield on 5.043 percent at maturity," Jujhar Singh, MD, Debt Capital Markets at StanChart India, told PTI from Singapore.
Singh further said the bonds, which are denominated in US dollars and have a maturity of 10 years, will have the same coupon at the March 4 issue, which was pegged at 5.125 percent.
The final guidance pricing (yields) for the unsecured senior bond issue was pegged at 100.50 percent above the US treasury.
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.
Singh further said that Bharti Airtel's original issue is currently trading at around 5 percent (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 USD 500 million, following its USD 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 USD 6.5 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.