Digicel $750M TLB for refi: call July 23

Digicel $750M TLB for refi: call July 23

Digicel, a Caribbean-based telecommunications company, is set to refinance a significant portion of its debt, with the potential deal amounting to $750 million. The company, founded by Denis O’Brien, has hired investment bankers at JP Morgan to facilitate the refinancing process [1].

The refinancing comes at a time when interest rates on US high-yield, or junk, bonds have fallen considerably. The ICE BofA US High Yield Index for B-rated companies has decreased to a little over 7% from 8.7% in early April [1]. This decline in interest rates has made it more favorable for companies like Digicel to refinance their debt.

The potential refinancing follows a debt restructuring that was completed in January 2024. During this restructuring, a consortium of bondholders led by PGIM, Contrarian Capital Management, and GoldenTree Asset Management took control of Digicel, swapping $1.7 billion of its borrowings for a 90% holding [1]. This restructuring was part of a broader effort to improve the company’s financial health and creditworthiness.

In addition to the favorable market conditions, Digicel has also been boosted by the US Department of Justice confirming that it has ended an investigation into potential violations of foreign bribery laws. The investigation was related to activities in Haiti, which has faced significant political and security challenges in recent years [1]. The decision to close the case was influenced by a combination of information gathered during the investigation and a move by former President Trump to pause FCPA enforcement actions [1].

Fitch Ratings has awarded Digicel’s main financing entity a credit rating of B, the most favorable assessment it has made of the group’s creditworthiness in six years. This rating, while still considered below investment grade, indicates that the company is on track to refinance its borrowings more than a year in advance of their scheduled maturity in May 2027 [1].

The refinancing is expected to be a significant step forward for Digicel, potentially allowing the company to reduce its debt burden and improve its financial flexibility. The deal, which could be launched within weeks, will be closely watched by investors and financial professionals.

References:
[1] https://www.irishtimes.com/business/2025/07/18/digicel-eyes-2bn-refinancing-as-junk-bond-yields-slide/