Category: Caribbean

Digicel, a Jamaica-based wireless provider, priced a $1.4 billion bond tighter than the initial price talk of 9.00%-9.25%. The $1 billion in cash pay bonds, priced at par with an 8.75% coupon, while $400 million in cash or PIK notes, also priced at par, with a 9.125% coupon. Predominantly European and US investors specialized in high-yield and emerging markets placed more than $7 billion in orders for the Caa2/CCC+ (Moody’s/Fitch) issue. A banker close to the deal attributed strong interest to the popularity with investors of Digicel’s owner Denis O’Brien, an Irish entrepreneur. Citi led the deal with JPMorgan as co-lead.

Digicel Group, the Caribbean telecom, will today, Thursday, look to price a $1.4 billion high-yield offering to yield 9.00%-9.25%. The price talk is viewed by some bankers away from the deal as aggressive, given that the company is 9x levered and rated Caa2 by Moody’s. The notes, due 2015 and callable after year 3, are in two tranches: $1 billion in cash pay bonds and $400 million in cash or PIK notes. The roadshow wrapped up its last stop in Los Angeles Wednesday. The targeted investor base is evenly split between high-yield accounts and emerging markets investors. Citi is on the left with JPMorgan as joint lead. Digicel is based in Jamaica and run by Irish entrepreneur Denis O’Brien.

Gross long-term borrowing by 25 Latin American and Caribbean sovereigns should grow to $427 billion this year, up a modest 5%-6% on last year, according to the third annual debt issuance survey conducted by ratings agency Standard & Poor’s. The report also highlights the declining role of official sector funding as sovereigns increasingly access the markets directly to issue debt. Moreover, “Gross official lending (from both bilateral and multilateral lenders) to regional sovereigns is likely to total only US$17 billion in 2007. Around 96% of government borrowing in 2007 should originate with local and external commercial sources, similar to the level in 2006,” continues the report. Brazil will once more be the region’s largest sovereign borrower.

Jamaica-based Digicel, the Caribbean wireless provider, launched a roadshow Wednesday for a $1.4 billion sale of 2015 senior notes expected to be priced at the end of next week. Price talk is due out early next week. Proceeds will be used to help Irish entrepreneur Denis O’Brien, who controls 78% of Digicel, buy back of the remaining shares of the company he doesn’t already own. Citi and JPMorgan are joint lead books on the unregistered deal.

Canada’s CIBC has increased its majority stake in FirstCaribbean International Bank to 91.49% after tendering for the remaining shares in the bank. At the end of last year, CIBC bought the 43.7% share owned by Barclay’s Bank for $988.6 million in cash. The Canadian bank then made a mandatory offer to all shareholders. FirstCaribbean, which is now the largest regionally listed bank in the English-speaking Caribbean, is also rumored to be interested in taking a stake in Royal Bank of Trinidad, perhaps as a precursor to a merger.

The debt swap offer proposed by Belize has so far been taken up by 93% of bondholders, the government announced on Wednesday. At the end of last year, the authorities in Belize offered to swap outstanding commercial foreign debt – totaling around $497 million – for new dollar bonds maturing in 2029. The new bonds, which start to pay principal in 2019, will bear interest in the first three years after issuance at a fixed per annum rate of 4.25%. In years four to five, the rate will step up to 6.00%, and thereafter through the maturity of the bonds the interest rate will level off at 8.50% per annum. All coupons are to be paid in cash on their respective due dates. The offer is due to close on February 20.