Cogeco 2015 Annual Report Download - page 87

86 COGECO CABLE INC. 2015 Consolidated financial statements
premium. These Notes are indirectly secured by a first priority fixed and floating charge and a security interest 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.
c) On October 1, 2008, the Corporation issued US$190 million Senior Secured Notes Series A maturing October 1, 2015, and $55 million
Senior Secured Notes Series B maturing October 1, 2018. The Senior Secured Notes Series B bear interest at the coupon rate of 7.60%
per annum, payable semi-annually. The Corporation has entered into cross-currency swap agreements to fix the liability for interest and
principal payments on the Senior Secured Notes Series A in the amount of US$190 million, which bear interest at the coupon rate of
7.00% per annum, payable semi-annually. Taking into account these agreements, the effective interest rate on the Senior Secured Notes
Series A is 7.24% and the exchange rate applicable to the principal portion of the US dollar-denominated debt has been fixed at $1.0625.
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 priority fixed and floating charge and a security interest 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. These
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.
d) On June 27, 2013, the Corporation completed, pursuant to a private placement, the issuance of US$215 million Senior Secured Notes.
The Senior Secured Notes bear interest at 4.30% payable semi-annually and mature on June 16, 2025. The Senior Secured Notes are
redeemable at the Corporation’s option at any time, in whole or in part, at 100% of the principal amount plus a make-whole premium.
These Notes are indirectly secured by a first priority fixed and floating charge and a security interest 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.
e) On November 16, 2010, the Corporation completed pursuant to a public debt offering, the issue of $200 million Senior Secured Debentures
Series 2. These debentures mature on November 16, 2020 and bear interest at 5.15% per annum payable semi-annually. These
debentures are indirectly secured by a first priority fixed and floating charge and a security interest 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.
f) On February 14, 2012, the Corporation completed pursuant to a public debt offering, the issue of $200 million Senior Secured Debentures
Series 3. These debentures mature on February 14, 2022 and bear interest at 4.925% per annum payable semi-annually. These
debentures are indirectly secured by a first priority fixed and floating charge and a security interest 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.
g) On May 27, 2013, the Corporation completed pursuant to a public debt offering, the issue of $300 million Senior Secured Debentures
Series 4. These debentures mature on May 26, 2023 and bear interest at 4.175% per annum payable semi-annually. These debentures
are indirectly secured by a first priority fixed and floating charge and a security interest on substantially all present and future real and
personal property and undertaking of every nature and kind of the Corporation and its subsidiaries except for the unrestricted subsidiaries.
The provisions under these debentures provide for restrictions on the operations and activities of the Corporation and its subsidiaries
except for the unrestricted subsidiaries. Generally, the most significant restrictions relate to permitted indebtedness, dispositions and
maintenance of certain financial ratios.
h) On March 5, 2008, the Corporation issued a $100 million Senior Unsecured Debenture by way of a private placement. The debenture
bears interest at a fixed rate of 5.936% per annum, payable semi-annually. The debenture matures on March 5, 2018 and is 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.
i) On April 23, 2013, the Corporation completed a private placement of US$400 million aggregate principal amount of Senior Unsecured
Notes. These Notes mature on May 1, 2020 and bear interest at 4.875% per annum payable semi-annually. They are guaranteed on a
senior unsecured basis, jointly and severally, by its subsidiaries except for the unrestricted subsidiaries. The provisions under these
Notes provide for restrictions on the operations and activities of the Corporation and its subsidiaries except for the unrestricted subsidiaries.
Generally, the most significant restrictions relate to permitted indebtedness, investments and distributions.
j) In connection with the acquisition of Atlantic Broadband on November 30, 2012, the Corporation concluded, through two of its United
States subsidiaries, First Lien Credit Facilities totaling US$710 million in three tranches. The first tranche, a Term Loan A Facility matures
on November 30, 2017, the second tranche, a Term Loan B Facility matures on November 30, 2019 and the third tranche, a Revolving
Credit Facility matures on November 30, 2017. Interest rates on the First Lien Credit Facilities are based on LIBOR plus the applicable
margin, with a LIBOR floor of 1.00% for the Term Loan B Facility. Term Loan A and B Facilities are subject to quarterly fixed amortization
schedule. In addition to the fixed amortization schedule and starting in the first quarter of fiscal 2015, loans under the Term Loan Facilities
shall be prepaid according to a prepayment percentage of excess cash flow generated during the prior fiscal year which may reduce
the quarterly fixed amortization schedule. The calculation of the excess cash flow prepayment is defined as follows:
(i) 50% if the Consolidated First Lien Leverage Ratio is greater than or equal to 4.00 to 1.00;
(ii) 25% if the Consolidated First Lien Leverage Ratio is greater than or equal to 3.00 to 1.00 but less than 4.00 to 1.00; and
(iii) 0% if the Consolidated First Lien Leverage Ratio is less than 3.00 to 1.00.
The First Lien Credit Facilities are non-recourse to the Corporation, its Canadian subsidiaries and Peer 1 Hosting's subsidiaries and are
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 Atlantic Broadband and its subsidiaries. The provisions under these facilities provide for restrictions
on the operations and activities of Atlantic Broadband and its subsidiaries. Generally, the most significant restrictions relate to permitted
indebtedness, investments, distributions and maintenance of certain financial ratios.
On May 28, 2013, the First Lien Credit Facilities were amended. Pursuant to the amendment, US$50 million of the Term Loan A Facility
was converted into the Revolving Facility resulting in amounts borrowed under the two tranches of US$190 million and of US$100 million,
respectively, while the Term Loan B Facility remained the same. Interest rates on the First Lien Credit Facilities are based on LIBOR
plus the applicable margin, with a LIBOR floor for the Term Loan B Facility. The applicable margin was reduced by 0.625% for the
Revolving Facility and for the Term Loan A Facility and by 1.00% for the Term Loan B Facility. In addition, the LIBOR floor for the Term
Loan B Facility was reduced from 1.00% to 0.75%. All other terms and conditions remained the same.