The global rating agency, Fitch has assigned investment grade rating, with negative outlook, to Bharti Airtel?s proposed billion dollar bond sale.
The agency has assigned Bharti Airtel International (Netherlands) BV?s proposed foreign-currency senior unsecured notes an expected ?BBB – (EXP)? rating. According to Fitch, the notes will be unconditionally and irrevocably guaranteed by India?s Bharti Airtel Limited (Bharti, BBB-/ Negative) and are therefore rated at the same level as Bharti?s Long-Term Issuer Default Rating of BBB-.
The ratings come ahead of the operator?s likely meeting with global investors for a benchmark bond sale which is expected to raise $1 billion.
Fitch has assigned negative outlook to the operator?s bond issue on account of the ongoing regulatory uncertainty experienced by the company?s Indian operations. Bharti Airtel is facing a one-time charge for holding additional spectrum (over 6.2 MHz) and the spectrum re-farming. However, the rating agency notes that since the operator would be paying these charges in installments instead of making an upfront payment ? it could hope to accelerate its deleveraging efforts.
According to Fitch, the final rating of the proposed notes is contingent upon the receipt of documents conforming to information already received. Bharti Airtel will use the proceeds from the proposed notes to refinance part of its existing debt and for general corporate purposes. As per Fitch, as of December 2012, Bharti had a total debt of $13.6 billion and cash and equivalents of $1.9 billion.
