Fitch downgrades Digicel International

Fitch Ratings said it downgraded the long-term issuer default rating of Digicel International Finance Ltd. (DIFL) to RD from C.

The agency, however, affirmed the IDRs of Digicel Group Holdings Ltd. (DGHL) and Digicel Ltd. (DL) at RD.

“The downgrade of DIFL reflects the expiration of the original grace periods to pay interest on DIFL's senior 2025 notes and subordinated 2026 notes on July 15, 2023. Fitch's revisions of its definition for restricted default (RD) removed ambiguity regarding multiple extensions of applicable grace periods. It also clarified that the relevant event in determining an RD rating is the uncured expiry of any applicable original grace period,” the agency said in a press release.

The group aims to shave debt by about $1.7 billion through a restructuring plan at different entity levels, including $1.175 billion at the DL and the DIFL level, lowering gross consolidated debt for the group to about $3 billion from $4.7 billion.

“The proposed comprehensive financial restructuring is expected to equitize 100% of the DL notes and the DIFL subordinated notes as well as refinance and extend the maturity of the company's other funded indebtedness. Creditors will become the main shareholders of the new group's structure. The completion of the restructuring is due to be complete toward the end of the year subject to required regulatory and other governmental approvals,” Fitch said.

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