DGL

--Proposed US$1.4 billion senior subordinated notes due 2015 assigned 'CCC+/RR5'.

DL

--Foreign currency Issuer Default Rating downgraded to 'B-' from 'B';

--US$450 million senior notes due 2012 downgraded to 'B-/RR4' from'B/RR4'.

DIFL

--US$850 million senior secured credit facility assigned 'B/RR3'.

The Outlook on all ratings is Stable.

The DGL's proposed US$1.4 billion senior notes due 2015 will be subordinated to DL's outstanding US$450 million senior notes due 2012 and will not have any specific guarantee or securing in the operating subsidiaries. Proceeds from the issuance are expected to be used primarily to purchase 100% of DL common equity. After the closing of the proposed transaction, Digicel outstanding debt will be allocated as follows:

--DIFL US$650 million in senior secured term loan (US$200 unfunded liquidity facility);

--DL US$450 million senior unsecured notes due 2012;

--DGL US$1.4 billion senior subordinated unsecured notes due 2015.

DGL's ratings reflect the company's high leverage, limited liquidity, as well as the expectation of rapid deleveraging from strong EBITDA growth, primarily coming from new higher risk markets, mainly Haiti. The ratings of the new notes at the DGL level also incorporate a level of subordination and prospects for below average recovery in the event of default. DL's IDR downgrade reflects the increased burden the proposed transaction places on the operating assets and loss of financial flexibility. Debt at DIFL is rated one notch higher than the group's IDR reflecting above average recovery prospects.

The company's debt levels have been increasing rapidly as a result of acquisitions and necessary funding for the rapid build-out of new markets, Haiti and Trinidad and Tobago (T&T). The proposed US$1.4 billion issuance at the new controlling company DGL, will further burden the company with debt. With the proposed transaction, consolidated debt at DGL, excluding project finance at Haiti and T&T, should total approximately US$2.5 billion, increasing substantially the indebtedness of the company. While Total debt to LTM EBITDA for DL is expected to be approximately at 4.0(x) times as of Mar. 31, 2007; DGL pro forma total debt to restricted group is estimated to be close to 8.5x for the same period. DL unsecured notes are guaranteed by all existing wholly owned subsidiaries, the Digicel restricted group, excluding T&T and Haiti subsidiaries. Once T&T and Haiti operations become increasingly EBITDA positive (both recently turned EBITDA positive after less than a year of operations) and credit enhancing to the restricted group, they are expected to be added to the restricted group and help lower consolidated leverage. Consolidated leverage is expected to decrease to around 6.5x for full fiscal year 2008 as reported EBITDA is expected to more than double almost entirely due to Haiti and T&T which are expected to go from negative EBITDA (primarily due to start-up of those business during the preceding year and the high levels of subscriber acquisition costs associated with strong subscriber growth) to positive EBITDA.

DGL's, DL's and DIFL's ratings, collectively referred as Digicel, also reflect its position as the leading provider of wireless services in the Caribbean, its strong brand recognition, growing portfolio of wireless assets and its high financial leverage. The ratings are constrained by increased debt levels and still negative consolidated free cash flow generation. Digicel has benefited from rapidly growing operating cash flow in its core operating assets and expanding its presence to 22 markets in the Caribbean in a relatively short period of time. Despite the efforts of the company to diversify away its revenue from Jamaican dollars, the company's operating cash flow generation is still concentrated in Jamaica. Despite that for the nine months ended Dec. 31, 2006 approximately 63% of revenues were generated either in US dollars, Euros or pegged to these currencies, while an important part of restricted group EBITDA is still linked to the Jamaican dollar. Digicel's largest market, Jamaica, is the country with the highest concentration of users for Digicel with 1.6 million. The ratings incorporate sovereign risks including transfer and convertibility risks associated with investments in Jamaica. Fitch considers that future expected EBITDA generation from the Haitian operation will support growth in cash flow but will also add a riskier source of revenue and cash flow generation relative to the current operations due to higher sovereign risk.

Digicel's operating performance continues to be strong. The company has rapidly gained leading market shares in most of the markets served by successfully executing a strategy of launching operations with extensive initial geographic coverage, good customer service, effective branding and through strong product offerings. This strategy has proved successful in turning operations EBITDA positive in a short period of time and gaining subscribers at a rapid pace. The company has leading market share positions versus incumbent operators in most its markets. The wireless penetration level in most of Digicel's markets is high, ranging between an estimated 42% and 90% with the exception of Haiti (20%), El Salvador (28%) and Guyana (14%). High wireless penetration rates are the result of low fixed-line penetration, long waiting periods to get fixed-line connections, good network coverage by wireless service providers and substitution of fixed-line by mobile.

Digicel is a leading wireless services provider in the Caribbean region. The Digicel assets are control by DIFL, which in turn is controlled by DL, which is controlled by DGL and owned by Denis O'Brien after the proposed transaction is closed. The company started operations in Jamaica in April 2001 and now offers GSM mobile services in 22 markets primarily in the Caribbean including Jamaica, St. Lucia, St. Vincent, Aruba, Grenada, Barbados, Cayman, Curacao, Martinique, Guadeloupe, Trinidad and Tobago and Haiti among others. For the LTM ended Dec. 31, 2006 Digicel consolidated revenues and EBITDA were approximately US$948 million and US$132 million, respectively. Restricted group EBITDA for that same period approximately UD$270 million and total subscribers as of Dec. 31, 2006 amounted to 4.1 million, including recently launched and or acquired operations.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.