Rogers Cable, a subsidiary of Toronto-based Rogers Communications, has closed on a new seven-year $1.075 billion credit line and upsized a $300 million note offering to $450 million, despite the parent company already having a heavy debt profile. Debt to EBITDA is now at four to one and the new $450 million note offering will prepay $300 million in notes due this year, said Eric Wright, manager of investor relations for Rogers. The credit line will also repay existing debt and fund capital expenditures, he added. Standard & Poor's believes the debt load to be heavy, driven by the capital-intensive nature of cable television systems, but the stable valuation of the systems offsets this. The senior secured loan is rated Baa3 and BBB-, said Wright.
TD Securities led the note offering and four banks co-lead the credit line, Bank of Nova Scotia, CIBC World Markets and Royal Bank of Canada, in addition to TD. Wright declined to disclose pricing or comment on the size of the line being replaced. In terms of the timing of the loan, he noted, "the opportunity was there." Rogers is Canada's largest cable operator and also provides high-speed Internet services and digital television. The cable business contributes 65% of Rogers Communications revenues and almost 90% of EBITDA. This is in contrast to the losses associated with the sports initiatives. Rogers contributed C$52 million to the Toronto Blue Jays baseball team to assist with its operating losses last year.