Rogers 2005 Annual Report Download - page 124

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120 ROGERS 2005 ANNUAL REPORT . NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(i x ) S e ni o r S e cu r ed Deb e nt u re s , d u e 2 01 6 :
Wireless’ US$154.9 million Senior Secured Debentures mature on June 1, 2016. These debentures are redeemable, in
whole or in part, at Wireless’ option, at any time, subject to a certain prepayment premium.
Each of Wireless’ Senior Secured Notes and Debentures described above is secured by the pledge of a senior
bond that is secured by the same security as the security for the bank credit facility described in note 11(b)(i) and ranks
equally with the bank credit facility.
(x ) S en i o r S ub o rd i n at e d N ot e s , d ue 20 1 2 :
On November 30, 2004, Wireless issued US$400.0 million Senior Subordinated Notes due on December 15, 2012. These
notes are redeemable in whole or in part, at Wireless’ option, at any time up to December 15, 2008, subject to a certain
prepayment premium and at any time on or after December 15, 2008 at 104.0% of the principal amount, declining ratably
to 100.0% of the principal amount on or after December 15, 2010.
Interest is paid semi-annually on all of Wireless’ notes and debentures with the exception of Wireless’ Floating
Rate Senior Secured Notes due 2010 for which Wireless pays interest on a quarterly basis.
(x i ) F a ir val u e i nc r eme n t a ri s ing fr o m p urc h as e a c c ou n ti n g:
The fair value increment on long-term debt is a purchase accounting adjustment required by GAAP as a result of the
acquisition of the minority interest of Wireless during 2004. Under GAAP, the purchase method of accounting requires
that the assets and liabilities of an acquired enterprise be revalued to fair value when allocating the purchase price of
the acquisition. This fair value increment is recorded only on consolidation at the RCI level and is not recorded in the
accounts of Wireless. The fair value increment is amortized over the remaining term of the related debt and recorded
as part of interest expense. The fair value increment, applied against the specific debt instruments of Wireless to which
it relates, results in the following carrying values at December 31, 2005 and 2004 of the Wireless debt in the Company’s
consolidated accounts:
2005 2004
Senior Secured Notes, due 2006 10.50% $ 161,632 $ 165,572
Senior Secured Notes, due 2010 Floating 643,857 665,119
Senior Secured Notes, due 2011 9.625% 605,875 630,090
Senior Secured Notes, due 2011 7.625% 461,648 461,925
Senior Secured Notes, due 2012 7.25% 550,871 569,006
Senior Secured Notes, due 2014 6.375% 857,172 883,551
Senior Secured Notes, due 2015 7.50% 644,409 665,488
Senior Secured Debentures, due 2016 9.75% 193,290 200,349
Senior Subordinated Notes, due 2012 8.00% 468,709 484,126
Total $ 4,587,463 $ 4,725,226
(c ) C A BLE :
(i ) Ba n k c re d it f ac i li t y:
In June 2005, Cable amended its bank credit facility (the “Bank Credit Facility”). The maximum amount of the facility
has been reduced by $75.0 million to $1.0 billion comprised of $600.0 million Tranche A and $400.0 million Tranche B.
The amendment served to extend the maturity dates of both Tranche A and Tranche B from January 2, 2009 to “bullet”
repayments on July 2, 2010 and eliminate the amortization schedule for Tranche B; reduce interest rates and standby
fees and relax certain financial covenants.
At December 31, 2005, $267.0 million (2004 – nil) was outstanding under the Bank Credit Facility.
The 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”),
subject 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 outstand-
ing 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.