Wednesday 21 November 2018

Digicel extends deadline for $3bn bond swap offer

Dennis O'Brien, chairman and co-founder of Digicel Group Ltd
Dennis O'Brien, chairman and co-founder of Digicel Group Ltd
Donal O'Donovan

Donal O'Donovan

Irish-owned telecommunications group Digicel has extended until November 16 a deadline for its bondholders to accept an offer to swap $3bn (€2.59bn) of outstanding debt for new securities with later maturity dates.

If accepted by lenders the deal will push back maturities on bonds scheduled to fall due in 2020 and 2022. The original early tender deadline for the offer was September 14, but it has been continually pushed back, reflecting resistance from lenders to the terms on offer.

In a statement announcing the extension Digicel said it continues to have constructive discussions with an ad hoc group of noteholders regarding the offers.

Until the latest extension the deadline was set for November 2.

The new deadline is 11:59pm, New York City time, on November 16. Denis O'Brien-owned Digicel has proposed a deal that includes a new corporate structure in which new debt will be issued from two new holding companies inserted between its holding company Digicel Group Ltd and operating company Digicel Ltd.

The offer is to exchange $2bn of bonds due in 2020 that carry an 8.25pc interest rate, for up to $2bn of new bonds at the same interest rate but maturing in 2022. Digicel also wants to swap $1bn of bonds that mature in 2022, and pay a 7.125pc interest rate, for $1bn of bonds due in 2024 - with interest of 8.25pc paid in a mix of cash and so-called payment-in-kind (PIK) notes - on which the interest rolls up as new debt.

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