O'Brien's Digicel plans to raise $300m

DENIS O’BRIEN’S Caribbean-based Digicel mobile phone group is planning to raise $300 million through a private placement of loan notes.

Digicel Ltd, which comprises the company’s operations in 23 Caribbean states and El Salvador, said yesterday that it intends to raise the money through the issue of 8.25 per cent senior notes due in 2017.

Digicel Ltd is a Bermudaincorporated company owned by Mr O’Brien. “The use of proceeds of this offering will be for general corporate purposes, including debt service and capital expenditure,” the company said.

It declined to say when it expected the placement to close.

Ratings agency Moody’s has assigned a B1 rating to the $300 million placement by Digicel Ltd. “The company’s very good liquidity supports the rating,” Moody’s said. The ratings agency said it expects Digicel will end full-year 2011 with about $550 million in cash on its balance sheet.

Moody’s most recent rating action for Digicel was on March 15th this year when it assigned a Caa1 rating to the company’s $775 million note issuance.

Digicel has completed other fundraisings over the past 18 months or so. In December 2009, it completed a $500 million corporate bond funding round that allows it to refinance other debt at a more attractive interest rate.

In March of last year, Digicel Ltd closed out a $335 million bond offering.

It used $215 million to buy a 35.8 per cent equity stake in Digicel Holdings (Central America) Ltd, a sister company that runs Mr O’Brien’s mobile operations in Honduras and Panama.