French Canadian quad-play operator Videotron has priced C$375m (US$282.8m) of senior unsecured notes due 2026 to refinance existing debt.
French Canadian quad-play operator Videotron has priced C$375m (US$282.8m) of senior unsecured notes due 2026 to refinance existing debt.
The notes will be sold at par, carry a coupon of 5.75% and mature on 15 January 2026, Videotron, a subsidiary of Montreal-based holding company Quebecor Media (TSX:QBR.A), said in a statement. Videotron’s fixed-line and wireless telecoms operations form the holding company’s primary business, while its secondary operations involve newspaper publishing, television broadcasting, music production and distribution, sports and entertainment.
Proceeds from the new notes will be used to repay part of the amounts outstanding under Videotron’s senior credit facilities along with fees and expenses.
“To successfully complete this transaction with a favourable pricing during this period of extreme volatility in the capital markets confirms the strength of the company’s credit profile,” Quebecor Media CFO Jean Francois Pruneau said.
Moody’s has rated the new notes Ba2 and affirmed Quebecor Media’s Ba3 corporate family and Ba3-PD probability of default ratings as well as Videotron’s Ba2 senior secured notes rating. The agency also maintained Quebecor Media’s stable rating outlook, but lowered its speculative grade liquidity rating to SGL-3 (adequate) from SGL-2 (good) as it expects slowing EBITDA expansion.
Earlier this week, Quebecor Media bought a 9.67% stake in itself from Caisse de dépôt et placement du Québec (CDPQ) for C$500m (US$379m) in cash, with a view to owning all of its shares in the long term. Following the transaction, CDPQ has reduced its ownership in the group from 28.6% to 18.93%.
“Quebecor Media’s Ba3 corporate family rating balances the sustainability and recession-resistance of the cable-based broadband communications cash flow of its Videotron subsidiary against the likely debt-financed buy out of Quebecor Media’s minority shareholder,” Moody’s said.
The agency added that it also expects Quebecor Media’s financial performance to be affected by ongoing capital expenditure and start-up costs related to its facilities-based wireless product and fixed-line margin pressure from IPTV competition.
As of 30 June, Videotron said it served 1.75 million cable TV customers, 1.54 million high-speed internet and 702,000 mobile subscribers. It said it provided cable telephone services to 1.34 million Quebec households and organisations.