Digicel extends deadline on debt exchange

Digicel extends deadline on debt exchange

Capital Markets Bonds Debt Caribbean

Digicel has extended the early deadline of a planned two-part distressed debt exchange to September 28 after entering into "constructive discussions" with an "ad hoc group" of bondholders.

The Caribbean telecommunications firm had originally set the early deadline at September 14. Shortly after this Moody's and Fitch Ratings dubbed the proposed exchange as distressed and said it was equal to a default.

Last week, Digicel said it wanted to replace the $2bn it has in existing 8.25% 2020 bonds with 8.25% 2022 notes under the moniker Digicel Group One.

Under Digicel Group Two, the company said it wants to exchange $1bn in outstanding 7.125% 2022s with up to $1bn in 8.25% senior cash pay, payment-in-kind (PIK) 2024 securities.

Under senior cash pay, bondholders accrue 7.125% on the 2024s, while PIK interest accrues at an additional 1.125%, Digicel said in a statement.

Both bonds are offering almost 30% in yield, according to secondary trading quotes.

Citi is the dealer manager on the liability management exercise.

Digicel reopened its 2020 bond in December 2013, adding $500m at 103 to yield 7.48%. The company first issued the bonds in September 2012.

The $1bn in 2022s were printed back in March 2014.

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