New Delhi: Close on the heels of raising USD 1 billion, Bharti Airtel today said it has garnered another USD 500 million through a bond issue mostly to pay off high interest loans and fund capex needs.
The company, which had on March 11 raised USD 1 billion through a 10-year bond issue, raised USD 500 million through senior notes.
Its subsidiary "Bharti Airtel International (Netherlands) BV has successfully raised USD 500 million notes (the Additional Notes) in addition to the recently concluded transaction of USD 1 billion 5.125 percent Fixed Rate Senior Unsecured Guaranteed 144A/Reg S Notes due 2023," the firm said in statement.
The company said additional notes were issued at a premium and priced at 100.625 percent to yield 5.044 percent and will be consolidated and form a single series along with the USD 1 billion notes that were issued on March 11, 2013.
"High participation by Fund Managers for an Indian Issuance and real money investor participation of 77 percent demonstrates the superior quality of the order book and the confidence the global investors have in the fundamentals and credit of the company," Bharti's Group Treasurer Harjeet Kohli said.
This is the largest ever telecom transaction out of Asia ex-Japan and the largest ever US dollar issue of an Indian company since rating action last year.
"The transaction is the first tap issuance out of India this year making it largest single tranche issuance in 2013 so far," the statement said.
A tap issue allows an issuer to avoid certain transaction or legal costs like issuing prospectus, and expedite fund raising process.
The company said the transaction drew an order book of approximately USD 2 billion with participation from 140 high quality investor accounts.
"In terms of geographic distribution, 50 percent of Additional Notes were distributed in the United States, 32 percent in Europe and 18 percent in Asia. The Notes were distributed to high quality fixed income accounts across fund managers, banks, sovereign wealth funds and insurance companies and private banks," the statement said.
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, raised nearly USD 6 billion from overseas debt market.