Mumbai: In the largest such sale by a private company this year, telecom major Bharti Airtel Monday raised USD 1 billion through a bond sale in the overseas market, merchant bankers said.
The 10-year unsecured bonds have a coupon of 5.125 percent per annum and were launched by Bharti Airtel International (Netherlands), a wholly-owned subsidiary of the telecom firm, Jujhar Singh, MD, capital markets at StanChart India, said.
Last Monday, Bharti launched roadshows in Asia, Europe and the US and had picked seven foreign banks for this unsecured senior bonds (or RegS bonds), which can be issued to non-US residents and qualified institutional buyers with lesser protection clauses.
Barclays, BNP Paribas, Citi, Deutsche Bank, HSBC, StanChart and UBS were the arrangers. The Bharti Airtel bond carried a BBB- rating from Fitch, BB+ from another agency S&P.
On February 1, Bharti Enterprises Group (holding company of Bharti Airtel), Chief Financial Officer Sarvjit Dhillon had said the company was planning to raise up to USD 1 billion before the end of the current fiscal.
In June 2011, Bharti had met investors but then developed cold feet about going ahead with a bond offering.
With this, the Sunil Mittal-promoted Bharti becomes the largest private sector borrower to tap the global bond markets this year after Reliance Industries' USD 800 million perpetual bond in late January.
More domestic companies are likely to access overseas markets for funding as rupee funds are too costly now. So far in 2013, over half a dozen companies, including RIL, Power Grid, Tata Com, ICICI Bank, HDFC Bank, among others, have raised USD 3.25 billion from overseas debt market.
As of the December quarter, Bharti had total debt of USD 13.6 billion and cash and equivalents of USD 1.9 billion as its African venture keeps bleeding. In the domestic space, where it is the top mobile services provider, the firm is unable to raise call charges considerably due to cut-throat competition.