India’s biggest private telecom operator Bharti Airtel has announced guidance for an offering of Ten-year US dollar benchmark bonds to yield around 220bp over US Treasuries.

India’s largest telecom company “Bharti Airtel” has approached investors for issuance of debt instruments in the form of US Dollar denominated Senior Unsecured Notes,” the company said in a statement.

billions of US dollars
Billions of US dollars

The notes are expected to be rated BBB- (Fitch) / BBB- (S&P) / Baa3 (Moody’s), it said.

“The proceeds will be used for capital expenditure in compliance with end-use guidelines set forth in the Master Circular by RBI and all laws and regulations of India applicable to the Company,” it added.

The bonds are expected to be listed on the Singapore Stock Exchange (SSE), it said.

Telecom Company Bharti Airtel recently completed a long-drawn spectrum auction in India, and has grand debt. The company made various overseas expansions over the past five years, which has makes more stretched in company balance sheet.

Meanwhile, Moody’s said that the proceeds from the notes are likely to be used for capital expenditure.

“However, as the company has committed to applying excess cash flows to debt reduction, this will not the result in an enhancement in leverage. At the same time, this transaction will extend Bharti’s Airtel debt maturity profile, which is credit positive,” says by Mr.  Annalisa Di Chiara, Who is Moody’s Vice President and Senior Analyst.

For the fiscal year ended 31 March 2015, Bharti’s Airtel Indian operations reported solid year-over-year growth (YOY) of 12% in revenue and 23% in EBITDA.

In particular reported the data services strong growth rate with a 30% YOY upgraded in the company’s data subscriber base, with 3G base increasing 90% YOY.

Telecom Businesses in India accounted for about 70% of consolidated revenue and 81% of reported EBITDA in financial year ended March 2015 (FYE March/2015).

Meanwhile, the currency movements against the dollar in FYE March/2015 negatively impacted the company’s African businesses, as proven in a 14% YOY contraction in EBITDA.

On a fix currency basis, the revenues expanded 6% while EBITDA contracted 8% YOY.

However, Moody’s constantly views favourably the on-going growth in subscribers in the African operations and the expansion of its mobile data revenue base, pointed out Moody’s, a ratings agency.

Indian company Bharti’s Airtel adjusted consolidated leverage metrics for FYE March/2015 remained relatively stable at around 3.0 x.



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