Digicel, the largest wireless telecommunications operator in the Caribbean, is marching on with its expansion plans despite global turmoil.
On March 6, Digicel Limited priced and closed the first high-yield corporate deal out of the region since last July. The $335 million privately placed, five-year, non-call three transaction priced with a 12% coupon to yield 15%. "We had a degree of flexibility. This wasn’t a deal we had to do, it was one we wanted to do," says Lawrence Hickey, group chief financial officer at Digicel. Citi led the deal and JPMorgan and Credit Suisse were joint bookrunners.
Unlike Mexican cement company Cemex, which had to cancel its high-yield bond issue planned for the same week, Digicel’s deal was met with relative enthusiasm despite coming out in the week that the Dow Jones sold off 500 points. Since then a bear market rally has taken off.
"I don’t think anyone thinks that recent gains in the market mark a turning point in the credit cycle," says a banker familiar with the deal. "The issuer wanted to get its deal out as soon as possible and at the time it looked like conditions were going to get worse with each week that went by."