Cogeco 2003 Annual Report Download - page 35

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Cogeco Cable Inc. 2003 33
9Long-term debt (continued)
The Term Facility and the operating line of credit described in note 8 are secured by a first fixed and floating charge 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 relate to permitted investments,
dividends on common shares and reimbursement of long-term debt as well as incurrence and maintenance of certain financial
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 greater of
par value or the Canada bond yield plus 0.3%. These debentures mature on June 4, 2009 and bears interest 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 future senior
indebtedness. These notes 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. 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 cross-currency swap agreements to fix the liability for
interest 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 US debt. The exchange rate applicable to the principal portion of the debt has been fixed at CDN $1.5910.
d) The Second Secured Debentures Series A are redeemable at the Corporation’s option, in whole or in part, at the greater of par
value or Canada bond yield plus 0.5%. These debentures mature on July 31, 2007, and bears interest at 8.44% per annum,
payable semi-annually. These debentures are secured by second fixed charges on certain assets and floating charges on all assets
of the Corporation and certain of its subsidiaries.
e) Principal repayments due on long-term debt for the next five years, excluding those under capital leases, are as follows:
2004 2005 2006 2007 2008
$1,400 $ 1,400 $ 16,520 $ 220,000 $ —
f) Minimum payments due under capital leases total $1,732,000 of which $167,000 represents financials expense and are
as follows:
2004 2005 2006 2007 2008
$0,789 $ 0,533 $ 00,301 $ 000,109 $ —
10 Deferred credit
The deferred credit represents the amount which would have been payable at August 31, 2003 under cross-currency swaps
entered into by the Corporation to hedge Senior Secured Notes Series A denominated in US dollars (See note 9 c)).
11 Capital stock
Authorized
Unlimited number of:
Class A Preference shares, without voting rights, redeemable by the Corporation and retractable at the option of the holder at
any time at a price of $1 per share, carrying a cumulative preferential cash dividend at a rate of 11% of the redemption
price per year.
Class B Preference shares, without voting rights, issuable in series.
Multiple voting shares, 10 votes per share.
Subordinate voting shares, 1 vote per share.