Fitch rates Bharti Airtel notes BBB-

Fitch Ratings said it assigned an expected rating of BBB- to Bharti Airtel International (Netherlands) BV's proposed senior unsecured euro notes.

The notes will be unconditionally and irrevocably guaranteed by India's Bharti Airtel Ltd., Fitch said, and are rated at the same level as Bharti's foreign-currency senior unsecured rating of BBB-.

The entire notes proceeds will be used to refinance the company's existing debt, the agency said.

The terms and conditions of the proposed bond are identical to Bharti's existing guaranteed bond of $1.5 billion due 2023. The notes will rank pari passu with issuer's existing and future senior unsecured indebtedness, Fitch added.

Bharti's funds flow-from-operations-adjusted net leverage will improve to 2.6x to 2.7x in the financial year ending March 2014 from 3.0x in FY13 following an equity injection of $1.3 billion from Qatar Foundation Endowment, the agency said.

This, along with free cash flow generation, will more than offset the addition of debt stemming from the acquisition of Qualcomm's spectrum for $1 billion and the increase in leverage by 0.15x to 0.2x due to the 13% depreciation of the rupee during the first half of 2014, Fitch said.

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