KOLKATA: Marquee global investors and bond funds, including Pacific Investment Management Co (PIMCO), Goldman Sachs Asset Management, Fidelity, BlackRock, TIAA, Loomis Sayles, Nan Shan Life, Ashmore Investment and Amundi Asset Management are believed to have participated in Bharti Airtel’s $1.25 billion (Rs 9,000 crore approx) overseas fundraise via two sets of global papers – a mix of senior and perpetual bonds.
The Sunil Mittal-led telco said it has priced $750 million worth of senior 10.25-year bonds at a yield of 187.5 basis points for an implied coupon of 3.250%. Network i2i Ltd, Airtel’s wholly-owned Mauritius arm, in turn, has priced $500 million of guaranteed subordinated perpetual 5.25-year bonds at a coupon of 3.975%.
The telco’s offshore fundraise, via perpetual and vanilla bonds, comes with Airtel building a war chest as it needs cash to buy spectrum in the upcoming 4G auction, invest in networks and also pay statutory dues, among other needs.
“Proceeds will be used for capex, repayment of existing indebtedness and/or any other purpose in compliance with end-use guidelines set forth in the FEMA ECB regulations and all other applicable laws and regulations,” Airtel said in an exchange filing Thursday.
The company said the overseas bonds offering was “significantly oversubscribed” with strong demand from several marquee Asian, European and US funds, adding that this is the largest fundraise by any Indian investment grade issuer since January 2019. The company also said this is “the lowest ever dollar funding cost on 10-year and perpetual debt for Airtel”.
It, though, did not respond to ET’s queries on the bidders. The individual investors, in turn, could not be reached immediately for comments.
Airtel shares were up 1.1% at Rs 579.15 on the BSE Thursday.
Ashish Sardana, Airtel’s group treasurer, said “strong reception of both our senior and perpetual bonds by high quality global investor community reflects its confidence in our business and credit,” adding that the telco remains focused on keeping its balance sheet strong, and that these issuances would further bolster Airtel’s capital structure.
“The peak order book of over $5 billion 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,” Bharti Airtel said.
It has bagged orders from 92 accounts for senior bonds, and from 97 accounts for the subordinated perpetuals. The order book, the telco, said is “very well distributed” by region, with over 30% from Asia Pacific, over 45% from Europe, the Middle East & Africa (EMEA) markets with the balance from the US.
Over 95% allocation of the senior bonds is to asset managers, insurance companies and real money accounts with the balance to private banks, corporates and broker dealers amongst others.
Barclays, BNP Paribas, BofA Securities, Citigroup, HSBC, JP Morgan and Standard Chartered Bank acted as joint lead managers and joint bookrunners, while DBS Bank & SMBC Nikko were co-managers on the trade. Legal advisors to the telco were Linklaters Singapore Pte while Cyril Amarchand Mangaldas & Co and Latham & Watkins LLP advised the lead managers.