Cogeco 2005 Annual Report Download - page 45

8LONG-TERM DEBT
(amounts are in thousands of dollars) Maturity Interest rate 2005 2004
%$$
Parent company
Term Facility 2007 — —58,000
Senior Secured Debentures Series 1 2009 6.75 150,000 150,000
Senior – Secured Notes
Series A – US $150 million 2008 6.83 178,065 196,950
Series B 2011 7.73 175,000 175,000
Second Secured Debentures Series A 2007 8.44 125,000 125,000
Deferred credit 2008 — 60,585 41,700
Subsidiaries
Obligations under capital leases 2010 5.87– 8.36 3,831 3,153
Preferred shares
(1)
———2,920
692,481 752,723
Less current portion 1,322 2,455
691,159 750,268
(1)
2,920,000 preferred shares in 2004, 5.5% cumulative dividend, redeemed in 2005 for a cash consideration of $3,004,000.
Interest on long-term debt amounted to $52,868,000 ($54,408,000 in 2004).
a) The Term Facility of $270,000,000 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 stamping fees.
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.
Cogeco Cable Inc. 2005
43
Notes to Consolidated Financial Statements