Bharti Airtel raises $342M in follow-on eurobond issue through Dutch arm

India’s largest telecom operator Bharti Airtel Ltd through its wholly-owned subsidiary Bharti Airtel International BV, has raised €250 million ($341.6 million or Rs 2,089 crore) through a bond offering to European investors, the company said today.

It has priced the five-year fixed rate senior unsecured guaranteed note at 4 per cent coupon rate. The notes will be fully and unconditionally guaranteed by Bharti Airtel.

The telecom giant had previously said it has opened the eurobond ‘tap’ through which it raised €750 million last month. With the firm pricing its follow-on 

euro-denominated bond issue, it has €1 billion in euro and $1.5 billion in US bond issues.

"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," said Harjeet Kohli, Group Treasurer of Bharti Airtel.

The notes have been priced at 275 basis points over the curve adjusted five-year EUR Mid Swap. Bharti Airtel will fully apply the net proceeds to refinance its existing debt.

The issue is priced 25 bps inside of the original tranche in December 2013, the firm said.

This is the first foreign currency bond issuance out of India in 2014 and the largest eurobond issuance out of the country (including the first tranche).

The notes attracted huge investor interest with an order-book aggregating €600 million from investors.

In terms of geographic distribution, 51 per cent of subscriptions were from UK, 16 per cent from France, 12 per cent from Netherlands, 19 per cent from other European countries and 2 per cent from Asian investors. Around 87 per cent of the allocations were made to real money fund managers, 10 per cent to SSA/insurance and 3 per cent to private banks.

Barclays, BNP, DB, JP Morgan, Standard Chartered and UBS acted as joint book runners and joint lead managers on the offering.

In March 2013, the company had raised $1.5 billion in overseas debt in two tranches, of which $1 billion was raised by issuing bonds with a coupon rate of 5.125 per cent, maturing in 2023, and the remaining $500 million was raised in second round within a month. The additional $500 million notes were issued at a premium.

(Edited by Joby Puthuparampil Johnson)

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