Cogeco 2013 Annual Report Download - page 80

Consolidated financial statements COGECO CABLE INC. 2013 79
k) In connection with the acquisition of Atlantic Broadband on November 30, 2012, the Corporation concluded, through two of its United
States subsidiaries, First Lien Credit Facilities totaling US$710 million in three tranches for net proceeds of US$641.5 million net of
transaction costs of US$18.5 million. The first tranche, a Term Loan A Facility will mature on November 30, 2017, the second tranche,
a Term Loan B Facility will mature on November 30, 2019 and the third tranche, a Revolving Credit Facility will mature on November
30, 2017. Interest rates on the First Lien Credit Facilities are based on LIBOR plus the applicable margin, with a LIBOR floor of 1.00%
for the Term Loan B Facility. Effective on December 31, 2013, the Term Loan A Facility is subject to quarterly amortization of US$3 million
in the first year, US$6 million in the second year and US$7.2 million in the third and fourth years. Effective on December 31, 2012, the
Term Loan B Facility is subject to quarterly amortization of 0.25% until its maturity date. In addition to the fixed amortization schedule
and commencing in the first quarter of fiscal 2015, loans under the Term Loan Facilities shall be prepaid according to a prepayment
percentage of excess cash flow generated during the prior fiscal year defined as follows:
(i) 50% if the Consolidated First Lien Leverage Ratio is greater than or equal to 4.00 to 1.00;
(ii) 25% if the Consolidated First Lien Leverage Ratio is greater than or equal to 3.00 to 1.00 but less than 4.00 to 1.00;
and
(iii) 0% if the Consolidated First Lien Leverage Ratio is less than 3.00 to 1.00.
The First Lien Credit Facilities are non-recourse to the Corporation, its Canadian subsidiaries and PEER 1's subsidiaries and are indirectly
secured by a first priority fixed and floating charge on substantially all present and future real and personal property and undertaking of
every nature and kind of Atlantic Broadband and its subsidiaries. The provisions under these facilities provide for restrictions on the
operations and activities of Atlantic Broadband and its subsidiaries. Generally, the most significant restrictions relate to permitted
indebtedness, investments, distributions and maintenance of certain financial ratios.
On May 28, 2013, the First Lien Credit Facilities were amended. Pursuant to the amendment, US$50 million of the Term Loan A Facility
was converted into the Revolving Facility resulting in amounts borrowed under the two tranches of US$190 million and of US$100 million,
respectively, while the Term Loan B Facility remained the same. Interest rates on the First Lien Credit Facilities are based on LIBOR
plus the applicable margin, with a LIBOR floor for the Term Loan B Facility. The applicable margin was reduced by 0.625% for the
Revolving Facility and for the Term Loan A Facility and by 1.00% for the Term Loan B Facility. In addition, the LIBOR floor for the Term
Loan B Facility was reduced from 1.00% to 0.75%. All other terms and conditions remained the same. In connection with the amendment,
transaction costs of US$6.2 million were incurred.
16. SHARE CAPITAL
A) AUTHORIZED
Unlimited number of:
Class A Preference shares, without voting rights, redeemable by the Corporation and retractable at the option of the holder at any time at a
price of $1 per share, carrying a cumulative preferential cash dividend at a rate of 11% of the redemption price per year.
Class B Preference shares, without voting rights, could be issued in series.
Multiple voting shares, 10 votes per share.
Subordinate voting shares, 1 vote per share.
B) ISSUED AND PAID
At August 31, 2013 2012
(In thousands of Canadian dollars, except number of shares) $$
15,691,100 multiple voting shares 98,346 98,346
33,205,623 subordinate voting shares (33,117,508 at August 31, 2012) 903,167 899,997
1,001,513 998,343
206,708 subordinate voting shares held in trust under the Incentive Share Unit Plan (149,802 at August 31, 2012) (8,840) (6,179)
992,673 992,164