(Jamaica Gleaner) Denis O’Brien’s Digicel Limited will use the US$1 billion it plans to raise via private placement to buy up its 12 per cent bonds and finance other projects.
The bonds were due to mature next year, but Digicel is taking the opportunity to restructure the profile of its debt. Fitch Ratings said if the offers are successful, Digicel will have no significant maturity payment before 2018.
The 2014 bonds are being redeemed at a cost of US$510 million, or US$1,068 per US$1,000 of bonds held, inclusive of a US$30 consent fee for bondholders who agree to lift certain covenants on the debt. The offer closes March 18.
The new notes, via private placement, will have a coupon of 6.0 per cent and mature in 2021.
The rest of the proceeds, net of expenses, will be used “for general corporate purposes, which could include capital expenditures, acquisitions, debt repayment or dividends to Digicel Group Limited (subject to the limitations in our debt instruments),” Digicel said.
Digicel last refinanced its debt in September 2012.
Digicel Group Limited’s total debt at December 2012 was approximately US$4.9 billion while cash balances amounted to US$353 million, according to Fitch.
