Rogers 2007 Annual Report Download - page 102

98 ROGERS COMMUNICATIONS INC. 2007 ANNUAL REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Further details of long-term debt are as follows:
(A) REORGANIZATION OF LONG-TERM DEBT:
On June 29, 2007, the $1 billion Cable bank credit facility, the
$700 million Wireless bank credit facility and the $600 million Media
bank credit facility were cancelled and the Company entered into a
new unsecured $2.4 billion bank credit facility, the initial proceeds
of which were used to repay and cancel each of the Cable, Wireless
and Media bank credit facilities.
On July 1, 2007, the Company completed an intracompany
amalgamation of RCI and certain of its wholly owned subsidiaries,
including Rogers Cable Inc. and Rogers Wireless Inc. The
amalgamated entity continues as Rogers Communications Inc. and
Rogers Cable Inc. and Rogers Wireless Inc. are no longer separate
corporate entities and have ceased to be reporting issuers. This
intracompany amalgamation does not impact the consolidated
results previously reported by the Company. In addition, the
operating subsidiaries of Rogers Cable Inc. and Rogers Wireless Inc.
were not part of and were not impacted by the amalgamation.
As a result of the amalgamation, on July 1, 2007, Rogers
Communications Inc. assumed all of the rights and obligations
under all of the outstanding Rogers Cable Inc. and Rogers Wireless
Inc. public debt indentures and cross-currency interest rate
exchange agreements. As part of the amalgamation process, on
June 29, 2007, Rogers Cable Inc. and Rogers Wireless Inc. released all
security provided by bonds issued under the Rogers Cable Inc. deed
of trust and the Rogers Wireless Inc. deed of trust for all of the
then outstanding Rogers Cable Inc. and Rogers Wireless Inc. senior
public debt and cross-currency interest rate exchange agreements.
As a result, none of the senior public debt or cross-currency interest
rate exchange agreements remain secured by such bonds effective
as of June 29, 2007.
As a result of these actions, the outstanding public debt and
cross-currency interest rate exchange agreements and the new
$2.4 billion bank credit facility are unsecured obligations of
Rogers Communications Inc. The Rogers Communications Inc.
public debt originally issued by Rogers Cable Inc. has Rogers
Cable Communications Inc. (“RCCI”), a wholly owned subsidiary,
as a co-obligor and Rogers Wireless Partnership (“RWP”), a wholly
owned subsidiary, as an unsecured guarantor while the Rogers
Communications Inc. public debt originally issued by Rogers Wireless
Inc. has RWP as a co-obligor and RCCI as an unsecured guarantor.
Similarly, RCCI and RWP have provided unsecured guarantees for
the new bank credit facility and the cross currency interest rate
exchange agreements. Accordingly, Rogers Communications Inc.’s
bank debt, senior public debt and cross-currency interest rate
exchange agreements now rank pari passu on an unsecured basis.
The Company’s subordinated public debt remains subordinated to
its senior debt.
(B) BANK CREDIT FACILITY:
(i) Corporate bank credit facility:
The RCI credit facility provides the Company with up
to $2.4 billion from a consortium of Canadian financial
institutions. The bank credit facility is available on a fully
revolving basis until maturity on July 2, 2013, and there are
no scheduled reductions prior to maturity. The interest rate
charged on the bank credit facility ranges from nil to 0.50%
per annum over the bank prime rate or base rate or 0.475%
to 1.75% over the bankers’ acceptance rate or the London
Inter-Bank Offered Rate (“LIBOR”). The Company’s bank credit
facility is unsecured and ranks pari passu with the Company’s
senior public debt and cross-currency interest rate exchange
agreements. The bank credit facility requires that the Company
satisfy certain financial covenants, including the maintenance
of certain financial ratios.
(ii) Cancelled Wireless bank credit facility:
Prior to its repayment and cancellation on June 29, 2007,
Wireless’ bank credit facility provided Wireless with up
to $700 million from a consortium of Canadian financial
institutions. There were no amounts outstanding under
Wireless’ bank credit facility at December 31, 2006. Interest
rates under the bank credit facility ranged from the bank
prime rate or base rate to the bank prime rate or base rate
plus 1.75% per annum, the bankers’ acceptance rate plus 1% to
2.75% per annum and LIBOR plus 1% to 2.75% per annum.
(iii) Cancelled Cable bank credit facility:
Prior to its repayment and cancellation on June 29, 2007,
Cable’s bank credit facility provided Cable with up to $1 billion
of available credit, comprised of a $600 million Tranche A credit
facility and a $400 million Tranche B credit facility, both of
which were available on a fully revolving basis until maturity
on July 2, 2010, and there were no scheduled reductions prior
to maturity. There were no amounts outstanding under Cable’s
bank credit facility at December 31, 2006.
The interest rate charged on the Cable bank credit facility
ranged from nil to 2.0% per annum over the bank prime rate
or base rate or 0.625% to 3.25% per annum over the bankers’
acceptance rate or LIBOR.
(iv) Cancelled Media bank credit facility:
Prior to its repayment and cancellation on June 29, 2007,
Media’s 2006 bank credit facility provided Media with up
to $600 million from a consortium of Canadian financial
institutions. There was $160 million outstanding under Media’s
bank credit facility at December 31, 2006. Borrowings under
this facility were available to Media for general corporate
purposes on a fully revolving basis until the facility was
cancelled on June 29, 2007. The interest rates charged on this
credit facility ranged 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.