Fitch rates Digicel notes B

Fitch Ratings said it assigned ratings of B with recovery rating of RR4 to Digicel International Finance Ltd.'s senior secured notes due 2024.

The private placement was upsized to $600 million from the previously announced $550 million and priced at 8¾%.

The proceeds will be used to repay both Digicel's $100 million revolving credit facility and Digicel Finance's $300 million term loan A fully.

The remaining proceeds will be used to improve liquidity and for general corporate purposes, as the company seeks to improve operating performance, Fitch said.

The notes are secured by a first lien on the company's assets and rank pari passu with Digicel Finance's remaining $1 billion term loan B, the agency said, and are senior to unsecured notes issued by Digicel Ltd., as well as the guarantee of those notes by Digicel Finance.

The notes are further senior to the unsecured debt at Digicel Group One Ltd., Digicel Group Two Ltd. and Digicel Group Ltd., Fitch said.

The company's debt is secured by the company's operating assets in the Caribbean, which account for more than 80% of the group's consolidated EBITDA, the agency said.

The group's revenues and EBITDA have contracted in recent years as mobile consumers shift to data from voice amid mobile maturity, Fitch said.

These issues have been exacerbated by local-currency depreciation against the dollar, which is expected to continue, the agency said.

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