Fitch affirms Bharti Airtel at 'BBB-' with a negative outlook

Details: Shailaja Pai; Category: Investment; 26 November 2021; 4967 views

Global rating agency Fitch Ratings has affirmed Bharti Airtel's long-term foreign currency Issuer Default Rating (IDR) and senior unsecured rating at 'BBB-'.

The outlook on the IDR is Negative, Fitch Ratings said in a statement. It has also affirmed Bharti Airtel International (Netherlands) BV's senior unsecured guaranteed bonds at 'BBB-' and Network i2i Limited's subordinated perpetual bond at 'BB'.

"The negative outlook does not reflect our view of Bharti's underlying credit profile - which has been improving on strong growth in Indian and African wireless operations - but rather the heightened probability that
The Negative Outlook does not reflect our view of Bharti's underlying credit profile - which has been improving on strong growth in Indian and African wireless operations - but rather the heightened probability that India's (BBB-/Negative) Country Ceiling of 'BBB-' could be lowered to 'BB+'. Such an action would constrain Bharti's IDR and senior issue ratings to 'BB+'.

"We forecast Bharti's FY22 funds from operations (FFO) net leverage to be 1.8x-2.0x in the financial year end-March 2022 (FY22), well below the threshold of 2.5x beyond which we will take negative rating action," Fitch said.

Meanwhile, Bharti raised about USD1 billion in 2021 through the sale of spectrum to Reliance Jio for USD210 million, sale of 25% stake in data centre entity Nxtra for USD235 million, and sale of a stake in Airtel Money for USD500 million.