Bharti Airtel bonds jump most in 5 years

SINGAPORE • Bharti Airtel Ltd’s dollar-denominated bonds due in 2023 surged the most in five years after the company offered to buy back the securities at above the market price amid the risk of a rating downgrade.

India’s second-biggest mobile phone carrier will pay US$985 (RM4,127) per US$1,000 principal amount plus accrued interest for any or all of the US$1.5 billion of March 2023 notes in the tender offer, according to a company filing over the weekend.

The bonds jumped 2.3 cents to 98 cents on the dollar as of 9am in Singapore yesterday, paring their loss for the year to eight cents.

Moody’s Investors Service placed the company’s Baa3 rating on review for a cut to ‘Junk’ grade on Nov 8 on concern about weak cashflow generation. The review also reflects Bharti Airtel’s low levels of profitability, particularly from its operations in India and higher debt levels to fund capital spending, the rating company said.

Analysts at Bank of America Corp and Wells Fargo & Co had earlier flagged the risk of the company slipping into junk category, citing debt levels and stiff competition in local markets.

Bharti Airtel has raised more than US$1.5 billion from asset sales, including a partial stake sale in its Africa business, to lighten its debt load, the company said.

Bharti Airtel slipped to No 2 last quarter, overtaken by a merger between Idea Cellular Ltd and the local unit of Vodafone Group plc. — Bloomberg