CHICAGO - (Business Wire) Fitch Ratings has assigned a 'BBB' rating to Rogers Communications Inc. (Rogers) $1.75 billion two-tranche debt offering. The offerings consist of US$350 million of 7.5% senior unsecured notes due 2038 and US$1.4 billion of 6.8% senior unsecured notes due 2018. The proceeds from the offering will be used for general corporate purposes, including the repayment of Rogers' outstanding credit facility debt. The Rating Outlook is Stable.
The ratings reflect Rogers' scale and scope in the wireless and cable business as this mix of assets results in a strong competitive position and allows for revenue diversification through its robust bundled service offer. As a result, Fitch expects Rogers to continue its positive operating momentum and sustain growth over the longer term.
Last week, the Advanced Wireless spectrum auction closed, and Rogers spent C$1 billion as the winning bidder for 59 licenses of 20 MHz (megahertz) spectrum. Rogers was the only bidder to acquire 20 MHz of nationwide spectrum. The other two incumbent operators, TELUS Communications and Bell Mobility, spent similar amounts, at C$880 million for 59 licenses and C$741 million for 54 licenses respectively.
While Rogers has good internally generated liquidity through its free cash flow and minimal maturities over the next several years, the recent spectrum auction has consumed the majority of its remaining credit facility availability. Pro forma for the credit facility drawdown, the company had an estimated C$300 million of availability on its C$2.4 billion unsecured credit facility, which Fitch would view as weak relative to its peers. However, in July, the company put in place a C$500 million 364-day unsecured revolving credit facility to ensure adequate liquidity. Fitch assumes the company will cancel the new 364-day revolving facility once the debt offerings close. The terms and covenants of the new debt offerings are virtually the same as Rogers' existing debt that has been issued since the beginning of 2004. Debt that was issued between 2001 and 2003 has additional covenant protection in the event the issue rating falls below investment grade.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
Fitch Ratings, Chicago
Bill Densmore, 312-368-3125
Dave Peterson, 312-368-3177
Brian Bertsch, 212-908-0549
(Media Relations, New York)
