Friday, 6 March 2009

Digicel Issue Faced Significant Troubles; Cemex Sale is Likely to Sink

Digicel appeared to have sold $300 million of 2014 bonds -- $150 million less than initially offered, with a coupon rate of 12 percent. The three-year non-callable issue has a first call at 112 (quite high.) The issue might be priced at 89.679 to yield 15 percent at maturity; One source told us affiliates are to purchase $50 million to $75 million subject to a six-month lock-up. At least, says the source, the Digicel bond will trade next to existing bonds.

We also hear rumours that Cemex's
bond plan of a benchmark size issue is facing significant obstacles to go through. The company is said to be reassessing the plan. Bookrunners (HSBC, RBS and Santander among others) might have to buy most of the issuance in case it hits the marketplace. We hear that yields would be close to 18 percent to 20 percent (not the 13 percent to 15 percent initially calculated.) One investor told us the issue won't pull through at this very moment -- he says Cemex is a very risky credit.

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