Bharti Airtel, which is in talks to buy the African operations of the Kuwaiti telecom firm Zain for $9 billion, has issued a term sheet to banks to raise up to $8.5 billion in offshore loans to fund the deal, banking sources said.
The six-year offshore facility has four tranches and carries a blended average life of 4.75 years, with a margin ranging from 176 basis points to 179 bps over Libor, sources said.
Previously, Bharti was said to be looking for a $9-billion facility, which also included an onshore rupee tranche.
Banking circle sources said the all-in pricing is below all expectations, which ranged from 200 bps to 250 bps above Libor. Bharti?s exclusive negotiations with Zain are scheduled to lapse on March 25.
A banker familiar with the deal said Bharti opted to drop the onshore tranche of its loan due to the strong response from offshore lenders. By raising the facility all in US dollars, the borrower also minimises execution risks and the time needed to complete the financing.
Barclays Capital, Citigroup, Standard Chartered Bank and State Bank of India are expected to underwrite larger amounts than other banks. Banks have until Wednesday to respond to the borrower, while documentation is expected to be completed by Friday.
When contacted a Bharti spokesperson declined to comment.
Banks have been offered a 60 bps fee to underwrite $650 million or more, sources said.