Digicel, the Caribbean-based telecoms company founded by Denis O’Brien, is on track to refinance $2.3 billion (€2 billion) of borrowings by May 2026, a year ahead of schedule, according to Fitch Ratings, as it awarded the business the highest credit rating in six years following a series of debt restructurings.
Fitch moved this week to give Digicel’s main financing entity a credit rating of B. While this is five levels deep into what is known as junk status, it is the most favourable assessment of the group’s creditworthiness since 2019.
Meanwhile, S&P Global, another leading ratings firm, has assigned a similar rating in recent weeks to Digicel, forecasting that its earnings grew for a second straight financial year to the end of March.
Mr O’Brien saw his stake in the business reduced to 10 per cent early last year as a consortium of bondholders led by PGIM, Contrarian Capital Management, and GoldenTree Asset Management took control of Digicel in January 2024 as they swapped $1.7 billion of its borrowings for a 90 per cent holding. It marked the group’s third debt restructuring in five years.
“Fitch expects the company to fully refinance its main debts (term loan and secured notes) due in 2027 by May 2026,” the ratings firm said in a statement.
“The ratings reflect Digicel’s improved capital structure post-restructuring and expected successful refinancing of its 2027 secured debt, which reduces leverage and enhances debt maturity and liquidity profiles.”
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Digicel enjoys operating profit margins of about 40 per cent across its 25 markets, which are mainly duopolies. “However, weak operating environments in markets like Haiti and currency depreciation risks offset these strengths,” Fitch said.
S&P said it expects Digicel to refinance the 2027 debt “in a timely manner”. The company also has $455 million of unsecured notes that fall due in 2028.
The prospect of Digicel carrying out its first big refinancing since the 2024 debt restructuring has been boosted by the US department of justice confirming to the group in April that it has ended an investigation that was looking into whether the business had breached foreign bribery laws.
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Digicel said in November that it had made a voluntary disclosure to the department of information “relating to possible violations of the US Foreign Corrupt Practices Act” (FCPA).
The Digicel disclosure to US authorities is said to relate to activities in Haiti, which has again descended into chaos in recent years as criminal gangs have grown in power. Armed gangs currently control of almost all of the country’s capital, Port-au-Prince.
The decision by US authorities to close the case had been due to a combination of information gleaned during the investigation as well as a move by US president Donald Trump in early February to pause FCPA enforcement actions.
The US attorney general issued new enforcement guidelines this week, with an overriding theme that any decisions to pursue investigations must be focused on helping US interests abroad.
S&P estimates that Digicel posted earnings before interest, tax, deprecation and amortisation (Ebitda) of $800 million for the year to the end of March. This would represent a 4.4 per cent increase on the result for the previous year. It also sees the group resuming modest dividends – of $16 million – for the first time in a decade.
“We assess Digicel’s business risk profile as weak, reflecting its solid position in markets that have high barriers to entry, but are exposed to substantial macroeconomic volatility,” said S&P.
