Digicel Group Ltd has announced the results to-date of its offers to exchange existing debt for various new securities, pursuant to the two confidential offering memoranda dated April 1, 2020, as amended or supplemented.
Digicel said as of April 15, it had received from shareholders, tenders of (i) $970,708,740 aggregate principal amount of Digicel Group Limited One’s 8.250 per cent Senior Notes due 2022 (the “Existing DGL1 Notes”), representing approximately 97.07 per cent of such notes, (ii) $814,465,696 aggregate principal amount of Digicel Group Ltd Two’s 8.250 per cent Senior Notes due 2022 (the “existing DL2 2022 Notes”), representing approximately 86.91 per cent of such notes. It said it also received tenders of $867,562,708 aggregate principal amount of DGL Two’s 9.125 per cent Senior Cash Pay/PIK Notes due 2024 (the “Existing DGL2 2024 Notes” and, together with the Existing DGL2 2022 Notes, the “Existing DGL2 Notes”), representing approximately 87.37 per cent of such notes, (iv) $1,145,966,000 aggregate principal amount of DL’s 6.00 per cent Notes due 2021 (the “Existing DL 2021 Notes”), representing approximately 88.15 per cent of such notes, and (v) $48,814,000 aggregate principal amount of the DL’s 6.75 per cent Notes due 2023 (the “Existing DL 2023 Notes” and, together with the Existing DL 2021 Notes, the “Existing DL Notes”; and together with the Existing DGL1 Notes and the Existing DGL2 Notes, the “Existing Notes”) representing approximately 5.28 per cent of such notes. “Because more than 50 per cent of the holders of each series of Existing Notes (other than the Existing DL 2023 Notes) have consented and withdrawal rights have expired, Digicel has executed supplemental indentures that eliminate substantially all restrictive covenants and events of default in the indentures for each series of Existing Notes (other than the Existing DL 2023 Notes), all of which are currently effective,” it explained in a release.This announcement comes days after the Bermuda incorporated company was downgraded by ratings agency Moody’s Investor Services, due to tightening liquidity, dwindling cash flow and debt estimated to be several times more than its earnings. In its rationale, Moody’s explained that on March 30, Digicel announced that it had deferred the payment of interests related to its Digicel Group Ltd One (DGL1) and Digicel Group Ltd Two (DGL2) Notes, which were due on March 30 and April 1.It said if Digicel did not pay these interests during the 30-day grace period, Moody’s would consider this a default. Moody’s indicated that even if the April 1 offer was completed as proposed it would “still consider the exchange offer as a distressed exchange, which is a default under Moody’s definition”.