IRISH-owned Digicel plans to tap the bond markets to raise $700m (€520m) in private placement notes as part of a deal that will improve the mobile phone company's debt maturity profile.
Digicel announced plans to launch a private placement of $700m of senior notes and offered to use the bulk of the proceeds to redeem early $510m of existing bonds that have a 12pc interest rate and are not due to be repaid until next year.
The remaining cash raised will be available for general corporate purposes that potentially include investment in capital expenditures, acquisitions, debt repayment or dividends.
The new notes will mature in 2021 and rating agency Fitch said the transaction will improve Digicel's debt maturity profile.
"Following the completion of the proposed offering, Digicel will not face any significant maturity until 2018," Fitch said.
The new bonds will have 'B' credit rating, Fitch said.
Last September Digicel completed a major €1.5bn refinancing that cut its borrowing costs and also pushed back the maturity profile of its bonds, after tapping strong investor demand to raise new lower cost debt.
The September deal was more than double the size expected when Digicel first announced the refinancing plan due to strong investor demand.
The mobile phone company is owned by billionaire businessman Denis O'Brien who is the biggest shareholder in Independent News and Media, the company that owns the Irish Independent.