Sat | Nov 28, 2020

Digicel extends bond swap offer for Caribbean retail investors

Published:Wednesday | November 18, 2020 | 12:14 AM
Digicel headquarters on the Kingston waterfront.
Digicel headquarters on the Kingston waterfront.

Some Caribbean retail investors participating in Digicel’s ongoing bond swap have agreed to swap their DGL2 note offer which was extended to allow more time for evaluation of the offer.

Digicel also set up a trust for Caribbean investors holding DGL2 and DGL3 bonds.

“To date, over 270 eligible DGL2 Caribbean retail holders owning approximately US$4.3 million of notes issued by DGL2 Limited have accepted the offer by the Holding Trust,” the telecom said in a statement.

The investors are holdouts who did not tender their bonds in the debt exchange executed by the telecom. Digicel said in a statement that it continues discussions with the stakeholders on the matter. Investors who continue to hold on to the old bonds could lose all their principal.

The deadline for swapping the DGL3 notes will run to December 15, as that bond was not initially included by the trust for consideration.

“During the course of the holdings trust’s offer to eligible DGL2 Caribbean retail holders, Digicel became aware that some eligible DGL3 Caribbean retail holders did not participate in a 2019 exchange offer made to DGL3 noteholders,” said Digicel, adding that effective from Friday, November 20, “the remaining approximate US$10.8 million aggregate principal amount of notes issued by Digicel Group Holdings Limited and held by the Holding Trust will be offered to eligible DGL3 Caribbean retail holders”.

Digicel warned that heavy acceptance could result in proportional allotments.

“For the avoidance of doubt, eligible DGL3 Caribbean retail holders should be aware that they may receive lower consideration than what is set out above if the pro rata mechanic is triggered,” Digicel said.

The new terms for DGL3 would see the extension of maturities to 2025 and noteholders receiving roughly US$260 per US$1,000 original investment.

Digicel refinanced four bonds this year. The telecom extended the life of the bonds for two years at lower coupon rates, reducing the company’s debt load by US$1.6 billion to about US5.4 billion in the process. Most bondholders accepted the refinancing terms, pushing back the maturity of the bonds, which will now be redeemed mostly in 2024 and one in 2025.