Best Corporates: Fast forward

Jun 28, 2013

Digicel took advantage of falling funding rates to refinance expensive debt at much cheaper levels

Jamaica-based Digicel knows how to take advantage of a bull market. Twice over the past year, the global telecoms operator has turned to dollar bond markets to bring down its cost of financing. And both times, it came away winning.

In September, it sold a $1.5 billion eight-year non-call four bond, on which it offered investors an 8.25% yield. The Caa1/B- rated transaction traded up a point on the break. Digicel put the cash towards a buyback of around $1.2 billion worth of 2015 securities on which it paid coupons of 8.875% to 9.875%.

The formula worked again in the first quarter this year. Rated...

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