Digicel completes $1.5bn bond offering

DIGICEL, THE mobile phone company controlled by Denis O’Brien, announced yesterday it had completed its $1.5 billion corporate bond offering to help refinance its borrowings.

The notes carry an interest rate of 8.25 per cent. The bulk of the proceeds of the bond offering is being used to buy back debt that was due to mature in 2015.

Digicel Group Ltd (DGL), which has operations in 30 markets across the Caribbean, central America and the south Pacific, said it had agreed to purchase $1.25 billion of notes from lenders.

This comprised $340.5 million of senior toggle notes with a yield of 9.125 per cent and 9.75 per cent, and $909.8 million priced at 8.75 per cent.

It is not clear what use will be made of the balance of the proceeds.

Colm Delves, Digicel’s group chief executive, said the bond offering had been “extremely well supported” by the international financing community, and was more than twice over-subscribed.

“We are very pleased to have priced this transaction at 8.25 per cent,” Mr Delves said.

“The funds allow us to refinance our existing 2015 bonds at an attractive rate.”

Blake Haider, a director with Citi, which acted as an initial purchaser on the bond offering, said the fundraising would significantly reduce DGL’s future refinancing risk.

“We are pleased to have helped Digicel Group Ltd leverage the strong market conditions to refinance existing bonds at a great rate. This is among the largest high-yield deals ever to come out of the Latin and Caribbean region,” Mr Haider added.

Citi, JP Morgan, Credit Suisse, Deutsche Bank, and Davy’s acted as initial purchasers on the bond offering. Citigroup Global Markets served as the dealer manager for the tender offer.