Fitch rates Bharti Airtel notes BBB-

Fitch Ratings said it assigned a rating of BBB- to Bharti Airtel Ltd.’s proposed dollar-denominated senior unsecured convertible notes. The notes are rated at the same level as Bharti’s foreign-currency senior unsecured rating of BBB and are also placed on rating watch negative.

The proposed interest-bearing notes will be a senior, unsubordinated, unsecured and unconditional obligation and will rank pari passu to Bharti’s senior unsecured indebtedness. The terms and conditions on the proposed notes are similar to Bharti’s existing senior unsecured notes except the presence of optional convertible features. Bharti will use the proceeds to fund its capex or to refinance its debt.

Holders of the proposed notes can convert to equity at a conversion price premium from a predetermined stock price, during the life of the notes as per the terms and conditions. The convertibles will be redeemed in cash at maturity if bondholders do not opt for the conversion. The issuer does not have an option to convert the notes into equity.

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