Star bond trader Hasenstab bets big on Digicel’s bonds

Franklin Templeton has emerged as a key backer of Denis O’Brien’s Caribbean telco Digicel

Michael Hasenstab, the star bond trader with Franklin Templeton who made billions of euros in a huge crisis-era bet on an Irish turnaround, has emerged as a key backer of Denis O'Brien's Caribbean telco Digicel.

March filings for the Templeton Global Total Return bond fund, which is managed by Mr Hasenstab (above), show it held Digicel debt with a market value of £516 million (€805 million). Digicel, which is gearing up for an autumn flotation in New York, has total bond debt of about $6.5 billion.

Mr Hasenstab’s fund holds about £135 million of an 8.25 per cent-yielding bond, maturing in 2020, which was issued by Digicel Group. It also has £125 million worth of a 7.125 per cent bond issued by the group, as well as £257 million of a 6 per cent bond issued by another entity, Digicel Limited.

Although Franklin Templeton would appear to be one of the biggest supporters of Digicel’s debt, the company’s paper has been bought by most of the world’s biggest bond investors.

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Goldman Sachs and Fidelity Investments are also believed to be large backers of the company's debt.

Mr O’Brien has not yet revealed how much Digicel intends to raise from its upcoming flotation, but it is expected that some of the proceeds will go towards reducing its leverage, which is high by industry standards.

Mark Paul

Mark Paul

Mark Paul is Business Affairs Correspondent of The Irish Times. He also writes the Caveat column