Cogeco 2004 Annual Report Download - page 41

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Cogeco Cable Inc. 2004 39
8LONG-TERM DEBT (continued)
a)
During the year, the Corporation revised the agreement with its lenders for the committed Term Facility, reducing the Term Facility
to $270,000,000. The Term Facility is repayable at any time without penalty but no later than January 31, 2007, and will be reduced to
$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 plus stamping fees or bank prime rates plus a prime margin.
The Term Facility and the operating line of credit described in note 7 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 purchased 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 multiple and subordinate voting
shares and reimbursement of long-term debt as well as incurrence and maintenance of certain financial ratios primarily linked to the
operating income before 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 bear 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 bear 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)
The deferred credit represents the amount which would have been payable at August 31, 2004 and 2003 under cross-currency swaps
entered into by the Corporation to hedge Senior Secured Notes Series A denominated in US dollars (See note 8 c)).
f) Principal repayments due on long-term debt for the next five years, excluding those under capital leases, are as follows:
(amounts are in thousands of dollars) 2005 2006 2007 2008 2009
$$$$$
1,400 1,520 183,000 — 388,650
g) Minimum payments due under capital leases total $3,522,000 of which $369,000 represents financial expense and are as follows:
(amounts are in thousands of dollars) 2005 2006 2007 2008 2009
$$$$$
1,244 1,011 819 443 5