Cogeco 2002 Annual Report Download - page 32

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Cogeco Cable Inc.
9. Customer base
2002 2001
Cost $1,040,333 $1,040,333
Accumulated amortization 50,781 50,781
$ 989,552 $ 989,552
10. Bank indebtedness
The operating line of credit available to the Corporation amounts to $25,000,000, of which $659,000 was used
at August 31, 2002. This line of credit is revised periodically, does not require commitment fees and is secured
on the same basis as the Term Facility (note 11).
11. Long-term debt and Term facility Interest
Maturity rate 2002 2001
Parent company
Term Facility 2007 4.85%(1) $ 129,000 $518,000
Senior Secured Debentures Series 1 2009 6.75 150,000 150,000
Senior – Secured Notes
Series A – US $ 150 million 2008 6.83 233,820 —
Series B 2011 7.73 175,000 —
Second Secured Debentures Series A 2007 8.44 125,000 125,000
Subsidiaries
Obligations under capital leases 2007 6.70–11.32 2,109 4,485
Preferred shares (2) 2006 — 5,720 7,120
Other — — 1,029 967
$821,678 $805,572
(1) Average interest rate on debt as of August 31, 2002, including stamping fees.
(2) 5,720,000 pre f e r r ed shares, 5.5% cumulative dividend, redeemable and retractable to a maximum of $1,400,000 annually.
a) The Corporation has revised the agreement with its lenders for the committed Term Facility, reducing the
Term Facility to $400,000,000. The Term Facility is repayable at any time without penalty no later than January
31, 2007, and will be reduced to $270,000,000 as at January 31, 2005, and $95,000,000 as at January 31, 2006.
The Term Facility requires commitment fees, and interest rates are based, at the Corporation's option, on
bankers' acceptance or bank prime rates.
The Te rm Facility and the operating line of credit described in note 10 are secured by a first fixed and floating
c h a rge on the assets of the Corporation and certain of its subsidiaries except for permitted encumbrances,
including purchase money obligations, existing funded obligations and charges granted by any subsidiary
prior to the date when it becomes a subsidiary subject to a maximum amount in proportion to consolidated
assets. The provisions under these facilities provide for restrictions on the operations and activities of the
Corporation. Generally, the most significant restrictions are related to permitted investments, dividends on
common shares and reimbursement of long-term debt as well as incurrence and maintenance of certain
f i n a n c i a l ratios primarily linked to the operating income before depreciation and amortization, financial
expense, fixed charges and total indebtedness.
b) The Senior Secured Debentures Series 1 are redeemable at the Corporation’s option, in whole or in part, at the
g reater of par value or the Canada bond yield plus 0.3%. These debentures mature on June 4, 2009, and bear
i n t e r est at 6.75% per annum, payable semi-annually. These debentures are indirectly secured by a first fixed and
floating charge and a security interest on all assets of the Corporation and certain of its subsidiaries.
c) The Senior Secured Notes are senior secured obligations and rank equally and rateably with all existing and
f u t u r e senior indebtedness. These Notes are indirectly secured by a first fixed and floating charge and a security
i n t e rest on all assets of the Corporation and certain of its subsidiaries. The Notes are redeemable at the
Corporation’s option at any time, in whole or in part, prior to maturity at 100% of the principal amount plus a
make-whole premium. The Series A mature on October 31, 2008 and the Series B mature on October 31, 2011.
The Senior Secured Notes Series B have an interest coupon rate of 7.73% per annum, payable semi-annually.
On November 1, 2001, the Corporation entered into cro s s - c u r rency swap agreements to fix the liability for intere s t
and principal payments on US $150,000,000 of its Senior Notes Series A which have an interest coupon rate of
6.83% per annum, payable semi-annually. These agreements have resulted in an effective interest rate of 7.254%
on the Canadian dollar equivalent of the U.S. debt. The exchange rate applicable to the principal portion of the
debt has been fixed at CDN$ 1 . 5 9 1 0 .