Global credit rating agency, Fitch Ratings has assigned ?BBB-? rating to Bharti Airtel?s Euro 250 million bond offering.
According to the rating agency, Bharti Airtel International (Netherlands) B.V.?s Euro 250 million four per cent senior unsecured notes due on 2018 are unconditionally and irrevocably guaranteed by Bharti Airtel and are therefore rated at the same level as Bharti Airtel?s foreign-currency senior unsecured rating of ?BBB-?.
The ?BBB? ratings indicate that expectations of default risk are currently low and the capacity for the payment of financial commitment is considered adequate. However, adverse business or economic conditions are more likely to impact this capacity. With negative outlook added to the rating, going forward, the ratings can be further downgraded.
Bharti Airtel plans to use the proceeds from the notes issue to refinance its existing debt which stood at Rs 608.77 billion at the end of September 30, 2013. Fitch Ratings expects Bharti Airtel?s earnings before interest, taxes, depreciation, and amortisation margin in the financial year 2014 to remain resilient at 31 per cent with the likely improvement in the competitive landscape for its Indian operations and with the likelihood of the operator gaining market share in Africa.
The credit rating agency has stated that it expects that the profitability from Bharti Airtel?s Indian operations will improve as industry over-capacity declines following the exit or contraction of smaller players.
