Digicel completes US$500m. bond offering

Digicel Limited on Tuesday announced that it has completed a US$500 million corporate bond offering of senior notes due 2017. The bonds were sold with a coupon of 8.25% and priced at 98.625 to yield 8.5%.{{more}}

The proceeds of the offering will be used to repurchase Digicel’s outstanding US$450 million 9.25% senior notes due 2012 in a tender offer or through redemption, with any balance retained by the company for general corporate purposes.

The offering was led by Credit Suisse, with Citi and J.P. Morgan acting as joint book-runners on the deal.

Colm Delves, Group CEO of Digicel, said: “We are very pleased with the success of this refinancing of our 2012 bonds, which shows our continued disciplined approach to our debt management. The transaction enabled us to take advantage of the attractive interest rates available to us. As our recent results show, Digicel is generating substantial cashflow 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 postpaid customer base and levels of data revenues, and new initiatives on WiMax and targeting Diaspora sales will help deliver continued out-performance.”

On November 17, Digicel reported a 10% increase in its half year profit (EBITDA) to US$364 million on revenues of US$857 million. Digicel has grown its subscriber base by 7% in the past 12 months to 7.3 million, and in its most recent quarter to September 30 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 served by Digicel and over 10 million customers. The wider group has shown a compound annual growth rate in subscribers of over 40% over the past two years.

Michael Speller of Credit Suisse, the lead book-runner of the offering, said: “Digicel has again demonstrated the level of support it has in the capital markets. 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.”