Denis O’Brien’s Caribbean and Central American mobile network operator Digicel has completed a US$500-million corporate bond offering of senior notes due 2017. The bonds were sold with a coupon of 8.25pc and priced at 98.625 to yield 8.5pc.
The proceeds of the offering will be used to repurchase Digicel’s outstanding US$450 million, 9.25pc senior notes due 2012 in a tender offer or through redemption, with any balance retained by the company for general corporate purposes.
Credit Suisse led the offering, with Citi and J.P. Morgan acting as joint book runners on the deal.
Debt management approach
“We are very pleased with the success of this refinancing of our 2012 bonds, which shows our continued disciplined approach to our debt management,” said Colm Delves, CEO of Digicel.
“The transaction enabled us to take advantage of the attractive interest rates available to us. As our recent results show, Digicel is generating substantial cash flow and profits. The lower coupon on our new issue reflects investors’ increasing comfort with Digicel’s declining risk profile.
“Even in this economic climate, with our approach to delivering best value, best network and best service, we are growing our business and continuing to drive subscriber growth in our newer markets in Panama and Honduras.
“We are making strong progress building our post-paid customer base and levels of data revenues, and new initiatives on WiMax and targeting Diaspora sales will help deliver continued out-performance,” Deves said.
On 17 November, Digicel reported a 10pc increase in its half-year profit (EBITDA) to US$364 million on revenues of US$857 million.
Digicel has grown its subscriber base by 7pc in the past 12 months to 7.3 million, and in its most recent quarter to 30 September, 2009, it added 98,000 subscribers.
Including Digicel’s sister companies Digicel Holdings (Central America) Limited and Digicel Pacific Limited, there are now 32 markets that Digicel serves, and more than 10 million customers. The wider group has shown a compound annual growth rate in subscribers of more than 40pc over the past two years.
“Digicel has again demonstrated the level of support it has in the capital markets,” explained Michael Speller of Credit Suisse, the lead book-runner of the offering.
“The quick execution and attractive rate achieved on this deal is a testament to the demand for this offering and Digicel’s strong track record,” Speller added.
By John Kennedy