Moodys.com
Close
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

Terms of One-Time Website Use

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

MOODY'S ASSIGNS B1 LOCAL CURRENCY CORPORATE FAMILY RATING TO DIGICEL LTD; B3 FOREIGN CURRENCY RATING ASSIGNED TO PROPOSED US $250MM SENIOR NOTES WITH A POSITIVE OUTLOOK.

12 Jul 2005
MOODY'S ASSIGNS B1 LOCAL CURRENCY CORPORATE FAMILY RATING TO DIGICEL LTD; B3 FOREIGN CURRENCY RATING ASSIGNED TO PROPOSED US $250MM SENIOR NOTES WITH A POSITIVE OUTLOOK.

First Time Rating / $250 million of Debt Securities Affected.

New York, July 12, 2005 -- Moody's Investors Service today assigned a B1 local currency corporate family rating (formerly known as the senior implied rating) to Digicel Ltd. and a B3 rating to its proposed issuance of US $250 million of senior unsecured notes. The rating outlook is positive.

The B1 local currency corporate family rating reflects concerns that free cash flow will be constrained in the near term as Digicel integrates recent acquisitions and launches new markets, as well as Digicel's limited financial flexibility due to its relatively heavy secured debt amortization requirements, and lack of a liquidity facility. The rating also reflects the emerging market risk associated with operating in Jamaica and other Caribbean islands and the company's thin equity capitalization after the repayment of shareholder contributions. It is supported by very strong results from the company's primary operating subsidiary in Jamaica, the similar success of Digicel's growing operations in other Caribbean islands, the relatively low leverage of the company as measured by total debt to EBITDA, and Moody's opinion of the good free cash flow generating ability of the company.

The rating outlook is positive reflecting Moody's opinion that the ratings are likely to move higher as initial investments in new and acquired markets subside and that cash flows should grow such that Digicel begins to generate material free cash flows above its mandatory amortization requirements.

Digicel is a rapidly growing cellular telephone service provider in the Caribbean islands of Jamaica, Barbados, St. Lucia, St. Vincent, Grenada, Curacao, Aruba, and the Caymans. While the company is currently preparing to launch service in Trinidad and Tobago and has acquired a license for a GSM network in Haiti, these operations will be undertaken by unrestricted subsidiaries of the issuer and will not be a part of the credit base supporting the rated obligations.

Digicel began its Jamaican operations in April 2001 as the second wireless operator, and overtook the incumbent Cable & Wireless in terms of total subscribers within 12 months. With over 1.4 million subscribers in Jamaica, Digicel's market share is over 70%. In the other islands where Digicel has launched, similar rapid subscriber and market share gains have been achieved. Digicel recently agreed to acquire Cingular's Caribbean wireless assets that will bring important new markets to Digicel in Bermuda and Antigua and further diversify the company's operations away from its reliance on Jamaica.

In the fiscal year ended March 2005, Digicel generated $165 million of adjusted EBITDA (adjusted to exclude share option buyback expenses), with approximately 95% of that coming from Jamaica. Pro forma for a full year of results from Curacao, EBITDA would have been $176 million with 88% contribution from Jamaica. The acquired Cingular operations are not currently EBITDA positive, and Digicel plans to make significant, one-time operating and capital investments to integrate these properties into Digicel's existing operations. Due to these investments, Moody's estimates significant free cash flow generation is likely to be deferred until fiscal 2007. Debt will total $641 million after the proposed transaction, resulting in total debt being 3.6 times pro forma EBITDA.

Restraining the B1 corporate family rating is the company's thin equity capitalization. Part of the proceeds from the proposed senior notes offering will be used to repay shareholder equity contributions, increasing the ratio of debt to total capital above 85%.

The B3 foreign currency rating (which is below Moody's B1 Jamaican foreign currency country ceiling) on the senior unsecured notes of Digicel Limited reflects their effective subordination of these notes to the obligations of the company's subsidiaries, primarily in the form of $391 million of senior secured bank debt. This senior secured bank debt represents over 50% of the company's total on-balance sheet third-party debt.

To improve its credit profile, Digicel must successfully integrate the Cingular properties and make them meaningful cash flow contributors as mandatory amortization requirements materially increase in fiscal 2007, totaling approximately US$ 60 million per year in FY07 and FY08. Due to the significant overlap of the Cingular assets with existing Digicel operations, Moody's believes Digicel should be able to improve their profitability. Consequently, Moody's assigns a positive outlook to the ratings signifying that the ratings are likely to move higher within the next 18 to 24 months, should the acquired Cingular operations generate a good return on investment, and if Digicel can continue to increase EBITDA, expand EBITDA margin above 40%, and sustainably produce free cash flow in excess of 7% of its total debt.

The ratings are likely to face downward pressure should Digicel begin to lose market share, if operational shortfalls (lower ARPU or higher churn) reduce profitability, or should the company make significant additional investments or acquisitions that defer material free cash flow generation. Moody's notes that Digicel has a license to operate in Haiti, but at this time has deferred plans to launch service in that troubled country. The ratings also would face downward pressure should Digicel's liquidity erode, pressuring its ability to meet its secured debt amortization requirements.

Moody's perceives a high level of business risk for Digicel as so much of the company's operations are located in developing economies, and currency fluctuations could drive up the cost of servicing US dollar denominated debt as the majority of the cash flows are generated in Jamaican dollars. Therefore adverse regulatory and economic developments (particularly devaluation of the Jamaican dollar versus the US dollar) in Digicel's operating environments would also likely have a negative rating impact.

Moody's analysis is based upon Digicel's most recent audited financial statements for the period ending March 31, 2004. Moody's ratings are conditioned upon a review of audited financial statements for the period ending March 31, 2005, reflecting results which substantially conform to the unaudited financial information provided by management. The proposed new senior notes will be issued under Rule 144A and will not be exchanged for SEC registered notes. The ratings are subject to review of final documentation that is consistent with Moody's understanding of the proposed transaction.

Digicel is the largest provider of wireless telecommunications in the Caribbean with over 1.7 million subscribers and LTM revenues of $477 million at March 31, 2005.

New York
Julia Turner
Managing Director
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Marcus Jones
VP - Senior Credit Officer
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​​​​​​
Moodys.com