Business Technology

Wednesday 19 June 2019

Digicel increases size of planned borrowing exercise to $600m

Denis O'Brien.
Denis O'Brien.
Gavin McLoughlin

Gavin McLoughlin

Digicel has increased the size of a planned borrowing exercise to $600m from $550m.

The telecoms company owned by Denis O’Brien is borrowing the money via a private placement of senior secured notes.

In an announcement this evening it said the notes would carry a coupon – or interest rate – of 8.75pc.

The funds borrowed will be used to pay down the company’s ‘Term Loan A’ facility, as well as any proceeds drawn from a revolving credit facility, which the company will still keep open after the repayments. Remaining proceeds will be used for general corporate purposes.

The placement is understood to have been three times oversubscribed.

It follows the company’s securing of consent from lenders to amend a debt to earnings covenant and its outlining of refinancing plans on an investor call last week.

Digicel does not publish quarterly financial results; however, it provides regular financial updates to bond investors and lenders.

Its total debt pile is around $6.8bn. The latest Digicel results showed  a net leverage to ebitda ratio of 6.8 times. That suggests a slower pace of debt reduction than forecast, which is understood to reflect a slower pace of disposals.

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