Digicel eyes €2bn refinancing as junk bond yields slide
, the Caribbean-based telecoms company founded by
Denis O'Brien
, has hired investment bankers at JP Morgan to help organise a potentially imminent refinancing of $2.3 billion (€2 billion), according to sources.
Bloomberg reported in recent days that a refinancing deal could be launched within weeks.
A spokeswoman for Digicel, which is based in Jamaica and operates in 25 markets, declined to comment.
Fitch Ratings last month awarded Digicel's main financing entity a credit rating of B, the most favourable assessment it has made of the group's creditworthiness in six years, saying it was on track to refinance the borrowings more than a year in advance of their scheduled maturity in May 2027. That credit rating is still considered below investment grade.
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The prospect of Digicel carrying out its first big refinancing since a debt restructuring closed in 2024 has been boosted by the US department of justice confirming to the group in April that it has ended an investigation that was looking into whether the business had breached foreign bribery laws.
It has also been helped by interest rates on US high-yield, or junk, bonds falling considerably in recent months. The ICE BofA US High Yield Index for B-rated companies, a benchmark for low-rated companies, has fallen to a little over 7 per cent from 8.7 per cent in early April. While bond and equity markets had wobbled earlier this week as Donald Trump raised the prospect of firing Federal Reserve chairman Jerome Powell, calm returned when the US president clarified he had no such plans.
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Digicel said in November that it had made a voluntary disclosure to the department of information 'relating to possible violations of the US Foreign Corrupt Practices Act' (FCPA).
The Digicel disclosure to US authorities is said to relate to activities in Haiti, which has again descended into chaos in recent years as criminal gangs have grown in power. Armed gangs control almost all of the country's capital, Port-au-Prince.
The decision by US authorities to close the case was due to a combination of information gleaned during the investigation, as well as a move by Mr Trump in early February to pause FCPA enforcement actions.
The debt restructuring that completed in January 2024 meant Mr O'Brien handed over a 90 per cent share in the business to a consortium of bondholders led by PGIM, Contrarian Capital Management, and GoldenTree Asset Management took control of Digicel in January 2024 as they swapped $1.7 billion of its borrowings for a 90 per cent holding. It marked the group's third debt restructuring in five years.
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