Bharti Airtel raises a further Rs 2100 cr ahead of spectrum auction

Bharti Airtel Ltd said it has raised a further 250 million euros (Rs 2,100 cr) by reopening an earlier bond issue, preparing itself for the upcoming spectrum auction.

Airtel has already raised 750 mln euros from the bond issue in December.

Bharti is expected to bid aggressively for spectrum in the coming auction, and has an agreement with Reliance Industries’ Jio Infocomm to share telecom infrastructure, including possible sharing of spectrum.

Spectrum trading or sharing is expected to be allowed soon after the auction, allowing operators who have bought spectrum to monetize their investment profitably.

It said the bonds, due for maturity in 2018, carried a 4% coupon rate and will be fully and unconditionally guaranteed by Bharti Airtel.

“The Notes attracted huge investor interest with an order-book aggregating circa EUR 600million from high quality investor accounts,” Bharti Airtel said.

This was the first foreign currency bond issuance out of Indian in 2014 opening the market for Indian Issuers and the first ever EURO tap (reopening) issuance by an Indian issuer.

It was also the largest euro bond issue out of India, at a total of 1 bln euros.

Bharti said the new transaction was priced 25 bps inside of the original deal priced in December 2013 and 87% of allocation was to “real money” fund managers.

The Notes have been priced at 275basis points over the curve adjusted 5-year EUR Mid Swap with a fixed coupon of 4% per annum . Bharti will fully apply the net proceeds to refinance its existing debt.

Mr. HarjeetKohli, Group Treasurer of Bharti, said, “We are delighted with the response in the Euro debt markets for Bharti Airtel. Across tenors and markets, Airtel now has USD 1.5bln in the USD bond markets and Euro 1 bln in the Euro bond markets. These issuances have much diversified our sources of funding, currencies and investor base. The pricing and appetite represent the strong demand for a robust and internationally diversified Investment Grade credit like Bharti Airtel.”

In terms of geographic distribution, 51% of subscriptions were from UK, 16% from France, 12% from Netherlands, 19% from other European countries and 2% from Asia. 87% of the allocations were made to real money fund managers, 10% to SSA/Insurance and 3% to Private banks.

Barclays, BNP, DB, J.P. Morgan, Standard Chartered and UBS acted as Joint Bookrunners and Joint Lead Managers on the offering.