Investors have agreed to lend $1.255 billion to Denis O'Brien's telecoms group Digicel that will allow it to repay existing debt and redeem bonds that were due to mature in 2020.
The sum raised is 33 per cent higher than the original $935 million that was sought by Digicel International Finance Ltd.
The company said that the loans were “significantly oversubscribed” with demand for its upsized Term Loan B issue being more than two-times oversubscribed with some 80 investors participating.
The new loans are on improved terms with maturities of between five and seven years.
Digicel has secured a five-year facility, called Term Loan A, of $300 million, priced at 350 basis points above Libor, an interbank rate used for lending.
Term Loan B totalled $955 million and is a seven-year facility priced at 375 basis points above Libor.
In addition, the company has secured a $100 million, three-year revolving credit facility, priced at 350 basis points over Libor.
Repay and redeem
The proceeds will be used to repay existing Digicel facilities of $916 million, to redeem $250 million of senior notes due in 2020, and for general corporate purposes, including capital expenditure.
Commenting on the fundraising, Digicel's chief executive Colm Delves said: "The transaction is consistent with the group's strategy of proactively managing our debt maturity profile on improved terms, where practicable. We have successfully replaced 7 per cent debt with lower coupon debt whilst pushing out our next material debt maturity to September 2020.The group remains focused on deleveraging over the near and medium term."
Blake Haider, managing director of Latin credit markets at Citi, the lead arranger on the transaction, said the investor response to Digicel's transaction was "extremely encouraging and supportive of the group's ongoing transformation programme".
The heavily-indebted group is currently in the middle of its biggest-ever restructuring plan, which would see 1,500 staff, or a quarter of its workforce, leave the company by the middle of 2018.
Digicel operates in 32 markets in the Caribbean, central America and the Pacific islands.