Digicel returns to bond market with near US$2-billion refinancing push
The company intends to sell US$1.55 billion worth of seven-year secured bonds due 2032 and US$415 million in eight-year (2033 maturity) unsecured notes to refinance debt. The seven-year bond is co-issued by Digicel International Finance Limited (DIFL) and DIFL US LLC while the eight-year bond is co-issued by Digicel MidCo Limited (DML) – DIFL’s indirect parent – and DIFL US II LLC.
The mobile phone operator also intends to take out a seven-year term loan for US$750 million plus a US$200-million revolving credit facility, it said in a presentation to investors. It will use the proceeds of the new bonds and loan deals to repay an existing loan and redeem in full two series of global notes: its 9 per cent Senior Secured First Lien Notes due 2027 and its 10.50 per cent senior notes due 2028. Fitch Ratings rated the 2032 bonds B and the 2033s B- . Both ratings are non-investment grade.
According to financial news reports LatinFinance, Digicel began calling investors on Wednesday to pitch the notes, opening the initial price talk at around 9 per cent for the 2032s and 10.75 per cent for the 2033s. It expects to price the deals as early as next week. The reports also named JPMorgan and Barclays as lead bookrunners on the Rule 144A/Reg S offerings, while Santander and UBS are acting as additional bookrunners.
The secured notes and credit facilities will be guaranteed by Digicel Intermediate Holdings Ltd and certain subsidiaries, with liens on most of DIFL’s and its guarantors’ assets. However, the revolving credit facility will take payment priority in certain default scenarios. The unsecured notes, issued by DML and DIFL US II LLC, will not be guaranteed at issuance.
The company explained that the notes are not registered under the US Securities Act, and are not being offered publicly in the United States.
Digicel, which has operations in 25 markets across the Caribbean and Central America, says it has been actively managing its debt in recent years amid efforts to streamline and stabilise its capital structure.
Digicel last issued bonds overseas in March 2019 when it sold US$600 million worth of five-year notes. Since then, the company has entered into two debt restructuring agreements with creditors — first in 2020 and again in 2023.”
