JAMAICA-BASED telecom company Digicel Group has upsized its senior secured notes offering to approximately US$1.99 billion, an increase of US$440 million from the originally planned US$1.55 billion. Alongside this, it is securing nearly US$1 billion in new loans, bringing its total refinancing package close to US$3 billion.

JPMorgan Chase & Co and Barclays Plc are leading the underwriting of this landmark refinancing, with initial pricing discussions indicating yields slightly below earlier estimates. The financing move aims to address maturing debts through 2027 and 2028, strengthen the company’s financial position, and follows a creditor-led restructuring and the recent resolution of a US Department of Justice investigation.

Details of the Bond Offering and Loan Facilities

Digicel is offering senior secured notes due in 2032 with a fixed interest rate of 8.625 per cent. Senior secured notes are debt instruments that provide lenders with a high level of security, as they hold top priority claims on a company’s assets in the event of financial distress. The notes’ “senior” status means they are repaid before other debt classes, while being “secured” means they are backed by substantial company collateral, mainly its operating assets held via subsidiaries.

The offering is expected to close on August 7, 2025, subject to customary closing conditions. In connection with the upsized offering of the notes, Digicel has cancelled its planned issuance of US$415 million senior unsecured notes due 2033, which would have carried higher yields and lacked collateral backing.

In addition to the bond issuance, Digicel is arranging new credit facilities comprising a seven-year term loan and a five-year revolving credit facility. The term loan involves scheduled repayments over seven years, providing a reliable source of long-term financing, while the revolving credit facility acts like a flexible credit line that Digicel can draw on as needed to meet operational or liquidity requirements. Together, these new loans amount to roughly US$950 million.

Context: Why the Refinancing Is Critical

This near US$3-billion refinancing package is designed primarily to retire substantial maturing debt obligations. The company currently has about US$2.3 billion of secured debt — including bonds and term loans — that come due in May 2027, alongside approximately US$455 million of unsecured bonds maturing in November 2028. These older debts carry relatively high interest rates, notably 9 per cent and 10.50 per cent, and refinancing them with longer-dated debt aims to ease Digicel’s short-term cash flow pressures and improve financial flexibility.

The proceeds from the new notes and loan facilities, together with available cash, will be used to redeem in full the outstanding 9.00 per cent senior secured first lien notes due 2027 and the 10.50 per cent senior notes due 2028, alongside paying related fees and expenses.

The upsizing of the bond offering from US$1.55 billion to US$1.99 billion was reportedly driven by investor demand and Digicel’s desire to raise sufficient funds to fully refinance existing obligations. JPMorgan Chase & Co and Barclays Plc are serving as lead banks on this transaction, underwriting and helping to place the new debt with investors.

Recent Corporate Developments

In 2023, Digicel underwent a significant restructuring when creditors, including Contrarian Capital Management, PGIM Inc, and GoldenTree Asset Management, executed a debt-for-equity swap that effectively transferred ownership control to these funds. This creditor takeover aimed to stabilise the company’s finances and operations amid challenging market dynamics.

Adding to this stabilisation, the US Department of Justice dropped an investigation earlier in 2025 concerning potential violations of the Foreign Corrupt Practices Act, removing a significant overhang for the company and investors alike. These developments likely contributed to renewed investor interest and more favourable financing terms.

Security and Guarantees

All new notes and loans will be guaranteed by Digicel Intermediate Holdings Limited (DIHL), the direct parent company of Digicel International Finance Limited (DIFL), and various subsidiaries, with liens on substantially all assets of DIFL and its guarantors. Subject to certain exceptions and agreed security principles, the debts will be secured on a first priority basis, granting lenders the highest legal claim over pledged collateral. Notably, the revolving credit facility will hold payment priority on collateral proceeds during any enforcement or insolvency proceedings.

The secured nature of this debt provides investors with priority claims over collateral, enhancing their protection in the event of default or insolvency proceedings.

Founded by Irish entrepreneur Denis O’Brien, Digicel serves about nine million customers across 25 markets, primarily in the Caribbean and Central America. The company offers mobile, broadband, and business communication solutions throughout the region.