Cogeco 2009 Annual Report Download - page 33

32 COGECO CABLE INC. 2009 Management’s discussion and analysis
For fiscal 2009, the average tenure of the long-term debt increased due to the issuance on June 9, 2009 of Senior Secured
Debentures Series 1 for $300 million maturing June 9, 2014, the issuance on October 1, 2008 of US$190 million Senior Secured
Notes Series A, maturing October 1, 2015, and $55 million Senior Secured Notes Series B maturing October 1, 2018, and the
repayments of US$150 million Senior Secured Notes Series A and the related derivative financial instrument, both maturing on
October 31, 2008, and of $150 million Senior Secured Debentures Series 1 at maturity on June 4, 2009.
In fiscal 2010, the financial leverage ratios relating to operating income before amortization should decline slightly due to the
projected reduction in operating income before amortization, partly offset by a reduction in indebtedness from the free cash flow.
See “Fiscal 2010 Financial Guidelines” section on page 44 for further details.
OUTSTANDING SHARE DATA
A description of Cogeco Cable’s share data as at September 30, 2009 is presented in the table below. Additional details are
provided in note 15 of the consolidated financial statements on page 70.
AMOUNT
NUMBER OF SHARES/
(in thousands
OPTIONS
of dollar
s)
COMMON SHARES
MULTIPLE VOTING SHARES 15,691,100 98,346
SUBORDINATE VOTING SHARES 32,867,426 891,715
OPTIONS TO PURCHASE SUBORDINATE VOTING SHARES
OUTSTANDING OPTIONS 716,745
EXERCISABLE OPTIONS 432,246
During fiscal 2009 and 2008 respectively, 153,381 and 113,084 stock options were granted. On April 6, 2009, the Corporation
cancelled 206,180 options which had been conditionally granted in relation with the acquisition of Cabovisão, at a price of $26.63
per share, subject to performance criteria of Cabovisão being met. Of these options, 93,518 were exercisable. The Corporation
recorded compensation expense for options granted on or after September 1, 2003.
FINANCING
On July 28, 2009, the Corporation repaid €15.7 million on the term loan, representing 15% of the amount drawn on the third tranche
of its $900 million Term Facility, which was reduced to $862.5 million reflecting the 2008 and 2009 repayments. The Corporation
benefits from an $862.5 million credit facility in the form of a Term Facility and an operating line of credit with a group of financial
institutions. The Term Facility is composed of four tranches: a first tranche, a revolving loan for an amount of $700 million available
in Canadian, US or Euro currencies; a second tranche, a swingline of $25 million available in Canadian or US currencies; a third
tranche of a remaining amount of $112.5 million, fully drawn, available in Canadian currency, and a fourth tranche of €17.4 million
fully drawn. On August 14, 2007, the Term Facility was amended to permit EURIBOR loans under the third tranche in an amount not
exceeding the equivalent of $150 million subject to reductions as mentioned below. On August 22, 2007, the third tranche of the
Term Facility of $150 million was drawn in Euros. The amount drawn in Euros of €104.6 million was established at the prevailing
exchange rate at that date. In accordance with the amended credit agreement, the amount available under the first tranche of
$700 million can be temporarily reduced in the event of an increase in the exchange rate affecting the amount drawn under the third
and fourth tranches. The Term Facility is repayable on July 28, 2011, except for the third tranche of €104.6 million; €15.7 million of
which was repaid on July 28, 2009 in addition to a repayment of €10.5 million on July 28, 2008, and the remainder of which is
repayable as follows: €26.1 million on July 28, 2010 and the balance on July 28, 2011. Earlier repayments can be made without
penalty. The Term Facility requires commitment fees, and interest rates are based on bankers’ acceptance, LIBOR, EURIBOR, bank
prime rate loan or US base rate loan plus stamping fees. The Term Facility is indirectly secured by a first priority fixed and floating
charge on substantially all present and future real and personal property and undertaking of every nature and kind of the
Corporation and certain of its subsidiaries, and provides for certain 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. 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 and dividends on multiple and subordinate
voting shares, as well as incurrence and maintenance of certain financial ratios primarily linked to the operating income before
amortization, financial expense and total Indebtedness. At August 31, 2009, the Corporation was in compliance with all of its
covenants and had used $219 million of its $862.5 million Term Facility for a remaining availability of $643.5 million.