Rogers 2003 Annual Report Download - page 89

2003 Annual ReportRogers Communications Inc. 87
Notes to Consolidated Financial Statements
(vii) Senior Subordinated Notes, due 2007:
Wireless’ U.S. $179.1 million Senior Subordinated Notes mature on October 1, 2007. During 2002, Wireless repurchased an
aggregate U.S. $35.9 million principal amount of these notes (note 10(e)). These notes are redeemable, in whole or in part,
at Wireless’ option on or after October 1, 2002, at 104.40% of the principal amount, declining ratably to 100% of the prin-
cipal amount on or after October 1, 2005 plus, in each case, interest accrued to the redemption date. The subordinated
notes are subordinated to all existing and future senior obligations of Wireless (including the bank credit facility and the
Senior Secured Notes and Debentures). The subordinated notes are not secured by the pledge of a senior bond.
Interest is paid semi-annually on all of Wireless’ notes and debentures.
(c) Cable:
(i) Bank credit facilities:
Effective January 31, 2002, Cable entered into a new amended and restated bank credit facility (the “New Bank Credit
Facility”) providing a bank credit facility of up to $1,075.0 million. At December 31, 2003, $36.0 million (2002 – $37.0 million)
was outstanding under the New Bank Credit Facility. The New Bank Credit Facility provides for two separate facilities:
(i) a $600.0 million senior secured revolving credit facility (the “Tranche A Credit Facility”) which will mature on January 2,
2009 and (ii) a $475.0 million senior secured reducing/revolving credit facility (the “Tranche B Credit Facility”) which is sub-
ject to reduction on an annual basis and which will be scheduled to reduce to nil on January 2, 2009, as outlined below. In
September 2003, Cable amended its New Bank Credit Facility to eliminate the possibility of earlier than scheduled matu-
rity of the Tranche B Credit Facility and established a carve-out, as described in the reduction schedule shown below.
The New Bank Credit Facility is secured by the pledge of a senior bond issued under a deed of trust which is secured
by substantially all of the assets of Cable and its wholly owned subsidiary, Rogers Cable Communications Inc. (“RCCI”), sub-
ject to certain exceptions and prior liens. In addition, under the terms of an inter-creditor agreement, the proceeds of any
enforcement of the security under the deed of trust would be applied first to repay any obligations outstanding under the
Tranche A Credit Facility. Additional proceeds would be applied pro rata to repay all other obligations of Cable secured by
senior bonds, including the Tranche B Credit Facility and Cable’s senior secured notes and debentures.
The Tranche B Credit Facility is available, subject to the restriction discussed below*, on a reducing/revolving
basis, with the original amount of credit available under the Tranche B Credit Facility scheduled to reduce as follows:
Date of reduction Reduction at each date
On January 2:
2006 $ 118,750
2007 118,750
2008 118,750
2009 118,750
* Of the $475.0 million availability under the Tranche B Credit Facility, $400.0 million is reserved to repay the aggregate amount of Cable’s
Senior Secured Second Priority Notes, due 2005 (the “Notes”) (note 10(c)(ii)) that is outstanding from time to time. When all or any portion
of the aggregate amount of the Notes is repaid from time to time from any source, including the Tranche B Credit Facility, then the
$400.0 million reserved amount is reduced by an amount equal to the repayment and such amount of the Tranche B Credit Facility becomes
fully available to Cable.
The New Bank Credit Facility requires, among other things, that Cable satisfy certain financial covenants, including the
maintenance of certain financial ratios. The interest rate charged on the New Bank Credit Facility ranges from nil to 2.25%
per annum over the bank prime rate or base rate or 0.875% to 3.25% per annum over the bankers’ acceptance rate or
LIBOR.
(ii) Senior Secured Second Priority Notes, due 2005:
Cable’s U.S. $291.5 million Senior Secured Second Priority Notes mature on March 15, 2005.
(iii) Senior Secured Second Priority Notes, due 2007:
On February 5, 2002, Cable issued $450.0 million 7.60% Senior Secured Second Priority Notes due on February 6, 2007.
The notes are redeemable at Cable’s option, in whole or in part, at any time, with at least 30 days and not more than
60 days prior notice subject to a certain prepayment premium.
(iv) Senior Secured Second Priority Debentures, due 2007:
Cable’s U.S. $74.8 million Senior Secured Second Priority Debentures were redeemed on June 26, 2003 at a redemption
price of 105.00% of the aggregate principal amount. During 2002, Cable repurchased U.S. $36.0 million of these debentures
(note 10(e)).