Fitch revises outlook on Airtel to negative from stable

Fitch Ratings has revised the outlook on Bharti Airtel’s Long-Term Foreign-Currency (FC) Issuer Default Rating (IDR) to negative from stable, affirming it at ‘BBB-’

The rating agency said the outlook change is sovereign-driven, and that projected that Bharti’s 2020-21 revenue and Ebitda (earnings before interest, taxes, depreciation, and amortisation) will remain robust, fuelled by improvement in the Indian wireless market and continued growth momentum in African markets, despite the effect of the coronavirus pandemic.

Fitch, last week, lowered India’s sovereign rating outlook to ‘negative’ from ‘stable’, saying the coronavirus pandemic has significantly weakened the country’s growth outlook. It, however, retained the lowest investment grade rating of ‘BBB-’

“Fitch Ratings has revised the outlook on India-based Bharti Airtel’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to negative from stable, and affirmed the IDR at ‘BBB-’,” it said in a statement on Monday.

Fitch said it has also affirmed Bharti’s senior unsecured rating and Bharti Airtel International (Netherlands) B.V.’s senior unsecured guaranteed bonds at ‘BBB-’, and Network i2i subordinated perpetual bond’s rating at ‘BB’

“The negative outlook follows our revision of the outlook on India’s Long-Term Foreign-and Local-Currency IDRs to negative from stable on June 18, 2020. Bharti’s FC IDR and senior issue ratings are not directly constrained by India’s sovereign rating but cannot exceed the country ceiling (BBB-), which reflects the transfer and convertibility risks associated with FC obligations,” the statement said.

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