Moody's gives Digicel notes B1

Moody's Investors Service said it assigned a B1 rating to Digicel Ltd.'s proposed $700 million of senior notes due 2021. Digicel is a wholly owned subsidiary of Digicel Group Ltd.

In addition, Moody's affirmed Digicel Group's B2 corporate family rating and B2-PD probability of default rating. In conjunction with the rating action, the agency affirmed the ratings on the existing debt. The outlook is stable.

Moody's said it views the transaction favorably due to the extension of the 2014 debt maturity and comparatively lower coupon on the new notes, which will reduce interest expense.

Digicel Group's B2 corporate family rating is supported by its leading position as the largest wireless telecommunications carrier in the Caribbean as well as its successful track record at gaining significant market share and producing solid operating results relatively quickly after new markets are launched, the agency said.

However, the company's history of debt-funded acquisitions, its sizable dividend payments and the likelihood that in the future it will acquire the portion of Digicel Holdings Central America that it does not currently own weigh down the rating, in Moody's view.

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