Moody's rates Digicel notes B1

Moody's Investors Service said it assigned a B1 (LGD 1) rating to the proposed $550 million senior secured notes due 2024 to be issued by Digicel International Finance Ltd. and Digicel Holdings (Bermuda) Ltd.

The Caa1 corporate family rating on Digicel Group Ltd. is unchanged, along with the ratings on all of the existing debt instruments within the group.

The outlook is stable.

The proceeds will be used to repay the drawings under Digicel's $100 million revolving credit facility, repay its existing $300 million term loan A at Digicel International, pay transaction fees and for general corporate purposes, Moody's said.

The new notes will have terms substantially similar to those of the existing secured credit facility, the agency noted.

The rating on the new notes is aligned with the ratings of the existing debt instruments and three notches above the Caa1 corporate family rating of Digicel, reflecting the notes positioning in the waterfall ahead of the debt instruments at Digicel Ltd., Digicel Group One Ltd., Digicel Group Two Ltd. and Digicel Group Ltd., Moody's said.

The ratings reflect the company's high leverage and untenable capital structure, along with its weak liquidity profile, the agency said.

The company benefits from product and geographic diversification, leading market positions and high operating margins, Moody's said.

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