Digicel Group Limited has effectively shaved its servicing costs on its bond debt in a successful placement that yielded 8.25 per cent on US$1.5 billion of newly issued notes.
Digicel initially sought to raise US$700 million but the strong demand saw the offer more than doubled last week.
The 8.25 per cent bond replaces the 9.125 per cent DGL Senior Toggle Notes and the 8.875 per cent Senior Notes with combined face value of US$1.415 billion, both of which were initially due to mature in 2015.
The new corporate bond matures in 2020.
"This transaction has again been extremely well supported by the international financing community having been more than twice oversubscribed. We are very pleased to have priced this transaction at 8.25 per cent. The funds allow us to refinance our existing 2015 bonds at an attractive rate," said Digicel Group CEO Colm Delves in a release.
Citigroup Global Markets Inc was the lead broker manager of the offer.
"This is among the largest high-yield deals ever to come out of the Latin and Caribbean region," said Citi director Blake Haider.
Digicel Group had an estimated US$4.9 billion of debt at June 2012 or 4.6 times EBITDA, spread across four entities within the company's structure. DGL itself had the largest block of debt, US$2.19 billlion, at June 2012 according to Fitch Ratings.
Founder and Chairman Denis O'Brien has leveraged the company to build his international network now spanning more than 30 markets and 13 million subscribers.
The company is currently turning over more than US$2 billion in annual revenues.