Cogeco 2010 Annual Report Download - page 62

Consolidated Financial Statements COGECO CABLE INC. 2010 61
13. Long-term debt
Maturit
y
Interest rate 2010 2009
(in thousands of dollars) % $ $
Parent company
Term Revolving Facility a)
Revolving loan — €90,000,000 (€ nil in 2009) 2014 2.63(1)(2) 121,635 –
Term Facility b)
Term loan — €nil (€78,413,625 in 2009) – – – 122,674
Term loan — €nil (€17,358,700 in 2009) – – – 27,142
Revolving loan — €nil (€40,000,000 in 2009) – – – 62,792
Senior Secured Notes Series B c) 2011 7.73 174,738 174,530
Senior Secured Notes d)
Series A – US$190 million 2015 7.00 201,387 206,606
Series B 2018 7.60 54,609 54,576
Senior Secured Debentures Series 1 e) 2014 5.95 297,379 296,860
Senior Unsecured Debenture f) 2018 5.94 99,806 99,786
Subsidiaries
Obligations under capital leases 2013 6.73 – 9.93 5,429 9,496
954,983 1,054,462
Less current portion 2,296 44,674
952,687 1,009,788
(1) Interest rate on debt at August 31, 2010, including the applicable margin.
(2) On January 21, 2009, the Corporation entered into a swap agreement with a financial institution to fix the floating benchmark interest rate with respect to a
portion of Euro-denominated loans outstanding under the Term Revolving Facility, and previously the Term Facility, for a notional amount of €111.5 million
which has been reduced to €95.8 million on July 28, 2009 and to €69.6 million on July 28, 2010. The interest swap rate to hedge the Euro-denominated loans
has been fixed at 2.08% until the maturity of the swap agreement on July 28, 2011. In addition to the interest swap rate of 2.08%, the Corporation will continue
to pay the applicable margin on these Euro-denominated loans in accordance with the Term Revolving Facility.
a) The Corporation benefits from a new $750 million Term Revolving Facility with a group of financial institutions led by two large Canadian
banks, which became effective on July 12, 2010, and replaced the Corporation’s $862.5 million Term Facility coming to maturity on July
28, 2011. This new Term Revolving Facility has an option to be increased up to $1 billion subject to lenders’ participation. The Term
Revolving Facility is available in Canadian, US or Euro currencies and includes a swingline of $25 million available in Canadian or US
currencies. The Term Revolving Facility may be extended by additional one-year periods on an annual basis, subject to lenders’ approval,
and, if not extended, matures four years after its issuance or the last extension, as the case may be. The Term Revolving Facility can be
repaid at any time without penalty. The Term Revolving Facility requires commitment fees, and interest rates are based on bankers’
acceptance, LIBOR in Euros or in US dollars, bank prime rate loan or US base rate loan plus the applicable margin. The Term Revolving
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 this facility provides 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 operating
income before amortization, financial expense and total indebtedness. At August 31, 2010, the Corporation was in compliance with all of
its covenants.
b) The Term Facility of a remaining amount of $862.5 million was fully repaid on July 12, 2010 and was 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 €17,358,700 fully drawn. The Term Facility was repayable on July 28, 2011, except for the
third tranche of €104,551,500; €15,682,725 of which was repaid on July 28, 2009 in addition to a repayment of €10,455,150 on July 28,
2008; the remainder of which was repayable as follows: €26,137,875 on July 28, 2010 and the balance on July 28, 2011. Earlier
repayments could have been made without penalty. The Term Facility required commitment fees, and interest rates were based on
bankers’ acceptance, LIBOR, EURIBOR, bank prime rate loan or US base rate loan plus the applicable margin. The Term Facility was
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 provided 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 provided for restrictions on the operations and
activities of the Corporation. Generally, the most significant restrictions were related 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.