Bharti Airtel has successfully priced its debt fund raise of US$1.25 billion through the issuance of its first ever dual-tranche bond offering spread across senior and perpetual issuance. This is the largest issuance by any Indian Investment Grade issuer since January 2019. This development comes after much speculation earlier this week regarding the same.
Bharti Airtel’s Investment Success – All Details
The Sunil Mittal-led teleco has priced $750 million of senior 10.25 year bonds at a yield of US 10 Year Treasury + 187.5 bps for an implied coupon of 3.250%. Airtel’s Mauritius-based subsidiary Network i2i Limited priced US$500 million in guaranteed subordinated perpetual NC 5.25 year bonds with a coupon of 3.975%.
The offering was significantly oversubscribed with demand from several marquee Asian, European and American funds. This trade had a peak order book of over $5bn at the time of final price guidance allowed the pricing to tighten significantly from Initial Price Guidance (“IPG”) on both tranches and allowed the Company to meet its pricing as well as size objectives. The senior 10.25 year tranche was launched at IPG of 230bps over 10 year US Treasuries and eventually tightened by 42.5bps to price at 10 year US Treasury + 187.5bps. Similarly, the Perpetual NC 5.25 tightened by 37.5bps from its initial price guidance.
Comments from Bharti Airtel
Ashish Sardana – Group Treasurer, Bharti Airtel said: “The strong reception of both our senior and perpetual bonds by high quality global investor community reflects its confidence in our business and credit. We remain focused on keeping our balance sheet strong and these issuances further bolster our capital structure. We are delighted by the outcome and thank our investors for their continuing support.
Lead Managers and Joint Bookrunners on the trade were:
- BNP PARIBAS
- BofA Securities
- J.P Morgan
- Standard Chartered
The Co-Managers on this deal were:
- DBS Bank Ltd.
- SMBC Nikko
Legal Advisors to the Company and Lead Managers, respectively:
- Linklaters Singapore Pte. Ltd.
- Cyril Amarchand Mangaldas & Co.
Statutory Auditors of the Company:
- Latham & Watkins LLP. Deloitte Haskins & Sells LLP Chartered Accountants
The transaction is subject to customary closing formalities.
Key Highlights of the Bharti Airtel Deal
- Orderbook from 92 accounts for the senior 10.25Y issuance and from 97 accounts for the subordinated perpetual bond.
- Book very well distributed by region- Over 30% from APAC , over 45% from EMEA with the balance from US accounts.
- Over 95% allocation of the senior bonds (and 93% in the case of the Subordinated Perpetual Bond )to asset managers, insurance companies and real money accounts with the balance to private banks, corporate, broker dealers and others.