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Digicel mobile gets high ratings from Moody’s

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Moody’s ratings agency has assigned a B1 local currency corporate family rating to Caribbean mobile operator Digicel and a B3 rating to its proposed issuance of US$250mn in senior unsecured notes, Moody’s said in a statement.

The rating outlook is positive. {{more}}

The B1 rating reflects concerns that free cash flow will be constrained in the near term as Digicel integrates recent acquisitions and launches in 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, Moody’s said.

This year Digicel has won spectrum auctions

to operate in Trinidad and Tobago and Haiti, acquired the Caribbean assets of US mobile phone service provider Cingular Wireless and closed a US$408 million syndicated funding agreement from a group of banks led by Citigroup.

Digicel also said this week it had added a BlackBerry wireless email platform to its portfolio of corporate services.

According to Marcus Jones, Moody’s head analyst for the Americas, investments in building up the new operations and consolidating Cingular’s assets will partially limit cash flow in the short

term. That explains the B1 rating.

Currency [fluctuations], potential devaluation in Digicel’s strongest market, Jamaica, and hurricanes also affect the rating, Jones told BNamericas.

“Jamaica is [Digicel’s] most established market and hurricanes have come through there and they’ve weathered that fairly well. We haven’t seen a period of currency instability though we know over the last 10 years there has been in Jamaica,” Jones said.

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