(Bloomberg) Bondholders in Digicel Group Ltd. should expect the phone company to decide in the near future on how to address its $6.8 billion debt load amid an earnings slump, according to people with knowledge of the matter. Digicel’s notes rose.
Executives told investors on a call Thursday that the company is reviewing a number of options, including so-called liability management exercises at the Digicel parent company level, said the people, who asked not to be identified because the call was private. Chief Financial Officer Ray Leclercq said decisions may be made shortly. Borrowers can use liability management to refinance, repurchase or modify existing debt, often to either reduce or extend the obligations. A company spokesman declined to comment.
The carrier founded by Irish billionaire Denis O’Brien said Wednesday that Leclercq will leave in September after a year in the post. Digicel also reported a decline in first fiscal quarter earnings, according to a report reviewed by Bloomberg News.
O’Brien has used high-yield debt to turn his mobile-phone carrier into a global operation with customers spread from El Salvador to Vanuatu. Investors have grown increasingly concerned after the company shelved a planned share sale in New York that was in part designed to pay down debt more than two years ago.
Digicel bonds were among the biggest gainers in the U.S. high-yield market on Thursday afternoon in New York. Its $2 billion notes due September 2020 added 4.4 cents on the dollar to 71.25 cents, according to Trace bond trading data. The debt’s retreat before today had pushed their yield to more than 30 percent. The April 2022 notes advanced 5.35 cents to 62.85 cents.