Shaw 2009 Annual Report Download - page 78

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2009 was held in cash and short-term securities and a portion of the proceeds from the $400,000
senior notes issuance in March 2007 was invested in short term investments pending the
repayment of maturing debt in October 2007.
Corporate
Bank loans
The Company has a $50,000 revolving operating loan facility, of which $627 has been drawn as
committed letters of credit. Interest rates and borrowing options are principally the same as those
contained in the credit facility described below. The effective interest rate on the facility was 3.09%
for the year (2008 – 5.49%; 2007 – 6.03%).
A syndicate of banks has provided the Company with an unsecured $1 billion credit facility due in
May 2012. At August 31, 2009, no amounts were drawn under the credit facility. Funds are
available to the Company in both Canadian and US dollars. Interest rates fluctuate with Canadian
bankers’ acceptance rates, US bank base rates and LIBOR rates. The effective interest rate on
actual borrowings during the year averaged 3.06% (2008 – 4.81%; 2007 – 5.04%).
Senior notes
The senior notes are unsecured obligations and rank equally and ratably with all existing and future
senior indebtedness. The notes are redeemable at the Company’s option at any time, in whole or in
part, prior to maturity at 100% of the principal amount plus a make-whole premium.
On March 27, 2009, the Company issued $600,000 of senior notes at a rate of 6.50%. The senior
notes were issued at a discount and the effective interest rate is 6.56%.
The Company has entered into cross-currency interest rate agreements to fix the liability for interest
and principal payments over the life of the US dollar senior notes. The table below outlines the US
dollar principal, the interest coupon rate, the effective interest rate on the Canadian dollar
equivalent of the US debt as a result of the agreements, and the exchange rate applicable to
the principal portion of the debt (“Exchange rate”):
US senior
note principal
$
Coupon rate
%
Effective
interest rate
%
Exchange rate
Cdn $ vs US$
440,000 8.25 7.88 1.4605
225,000 7.25 7.68 1.5815
300,000 7.20 7.61 1.5895
Other subsidiaries and entities
Videon CableSystems Inc. (“Videon”)
On April 15, 2009, the Company redeemed the Videon Cablesystems Inc. Cdn$130,000 Senior
Debentures which were due April 26, 2010.
The debentures were unsecured and non-recourse to the parent company and were guaranteed by
the subsidiaries of Videon. The effective interest rate on the debentures was 7.63% after giving
effect to the fair value adjustment to the debt at the date of the Moffat acquisition.
74
Shaw Communications Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2009, 2008 and 2007
[all amounts in thousands of Canadian dollars except share and per share amounts]