Canada’s largest mobile operator Rogers Communications has completed a US$1.87bn bond issue which will help to finance its recent C$3.29bn (US$2.97bn) acquisition of 700 MHz spectrum.
Rogers sold a bond denominated in Canadian dollars split into three…
Canada’s largest mobile operator Rogers Communications has completed a US$1.87bn bond issue which will help to finance its recent C$3.29bn (US$2.97bn) acquisition of 700 MHz spectrum.
Rogers sold a bond denominated in Canadian dollars split into three tranches that raised US$1.12bn, and US$750m sold in US dollars.
In a company statement the operator’s CFO Anthony Staffieri commented: “Not only did we get the spectrum we wanted for our customers, but we have financed it with [US$1.87bn] of long term funding for up to 30 years at some of our lowest rates ever, with an average interest rate of just 3.9%.”
He added that the company had kept its Baa1/BBB+/BBB+ senior credit ratings, which he said reflected the confidence ratings agencies had in the telco’s prospects.
It will pay the remaining consideration of the spectrum with cash on hand and other available debt.
Rogers added that the principal and interest obligations on the US dollar-denominated debt had been fully hedged against fluctuations in the Canadian dollar foreign exchange rate for the entire term of the notes.
Citigroup, BofA Merrill Lynch, RBC Capital Markets and JP Morgan acted as joint bookrunners on the transactions.
Rogers bought 20-year 700 MHz licences in last month’s auction, acquiring more paired blocks than its rivals. However it raised eyebrows by spending almost three times as much on its haul as the next highest bidder.
It bought 22 paired blocks across the country’s main markets whereas Telus and Bell bought three quarters of that amount, but only spent C$1.14bn and C$565m respectively.
