Rogers 2006 Annual Report Download - page 101

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97
RO GER S CO MMU NIC AT ION S IN C . 20 0 6 ANN UA L RE POR T
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ii) Senior Secured Second Priority Notes and Debentures:
Each of Cable’s Senior Secured Second Priority Notes and Debentures
is secured by the pledge of a senior bond which is secured by the
same security as the security for Cable’s bank credit facility described
in note 15(b)(i) and rank equally in regard to the proceeds of any
enforcement of security with the Tranche B credit facility.
Each of Cable’s Senior Secured Second Priority Notes and Debentures
is redeemable at Cable’s option, in whole or in part, at any time, sub-
ject to a certain prepayment premium.
Interest is paid semi-annually on all of Cable’s notes and debentures.
(C ) MEDIA:
Media’s bank credit facility provides Media with up to $600 million
from a consortium of Canadian financial institutions. Borrowings
under this facility are available to Media for general corporate pur-
poses on a fully revolving basis until maturity on September 30, 2010
and there are no scheduled reductions prior to maturity.
The interest rates charged on this credit facility range from the bank
prime rate or U.S. base rate plus nil to 2.0% per annum and the
bankers’ acceptance rate or LIBOR plus 1.0% to 3.0% per annum. The
bank credit facility requires, among other things, that Media satisfy
certain financial covenants, including the maintenance of certain
financial ratios.
The bank credit facility is secured by floating charge debentures
over most of the assets of Media and three of its subsidiaries, Rogers
Broadcasting Limited (“RBL”), Rogers Publishing Limited (“RPL”)
and Sportsnet, subject to certain exceptions. Each of RBL, RPL and
Sportsnet has guaranteed Media’s present and future liabilities and
obligations under the credit facility.
(D) DEBT REPAYMENTS:
(i) During 2006, the Company redeemed or repaid an aggregate
$261 million principal amount of Senior Notes and Senior Secured
Notes as well as a mortgage and capital leases in the aggregate
principal amount of $25 million. A prepayment premium of
$1 million was also incurred as part of these repayments.
(ii) During 2005, the Company redeemed an aggregate U.S. $606 mil-
lion principal amount of Senior Secured Second Priority Notes,
Senior Secured Notes and Senior Subordinated Guaranteed
Debentures for cash and converted U.S. $225 million face value
amount of Convertible Debentures by issuing 15,432,896 Class B
Non-Voting shares and paying U.S. $0.3 million in cash. The
Company also converted the $600 million face value of its
Convertible Preferred Securities and issued 34,285,714 of Class B
Non-Voting shares in return. The Company paid aggregate
prepayment premiums and other expenses of U.S. $21 million,
wrote off deferred financing costs of $3 million and wrote off
$16 million of the fair value increment related to the Senior
Secured Notes that arose on the acquisition of Call-Net. As a
result, the Company recorded a loss on the repayment of debt
of $11 million.
(E) WEIGHTED AVER AGE INTEREST RATE:
The Company’s effective weighted average interest rate on all long-
term debt, as at December 31, 2006, including the effect of all of the
derivative instruments, was 7.98% (2005 – 7.76%).
(F) PRINCIPAL REPAYMENTS:
As at December 31, 2006, principal repayments due within each of
the next five years and in total thereafter on all long-term debt are
as follows:
2007 $ 451
2008 1
2009 –
2010 801
2011 1,206
Thereafter 4,493
(G) FOREIGN EXCHANGE:
Foreign exchange gains related to the translation of long-term debt
totalled less than $1 million (2005 – $33 million).
The provisions of the long-term debt agreements described above
impose, in most instances, restrictions on the operations and activities
of the companies governed by these agreements. Generally, the most
significant of these restrictions are debt incurrence and maintenance
tests, restrictions upon additional investments, sales of assets and
payment of dividends. In addition, the repayment dates of certain
debt agreements may be accelerated if there is a change in control
of the respective companies. At December 31, 2006 and 2005, the
Company was in compliance with all terms of the long-term debt
agreements.