NEW YORK-Rogers Cantel Inc., a wholly owned subsidiary of Rogers Cantel Mobile Communications Inc., sold an $800 million debt issue May 22 to refinance at lower rates outstanding indebtedness that had an interest rate of 10.75 percent.
The new issue was divided into three parts, or tranches, with different maturity dates and interest rates. The first comprised $510 million (U.S.) in senior secured debentures maturing in 2008 and priced to yield an interest rate of 9.4 percent. The second consisted of $175 million (U.S.) in senior secured debentures due in 2016 and priced to yield 9.8 percent. The third was a Canadian dollar-denominated issue of $160 million in senior secured notes due 2006, priced to yield 10.6 percent.
The first tranche has a seven-year call option, while the other two are non-callable for life.
Moody’s Investors Service rated the issue Ba-3, and Standard & Poor’s Corp. rated it BB+.
Merrill Lynch & Co. was the lead underwriter.
Rogers Cantel Inc., headquartered in North York, Ontario, is Canada’s largest wireless telephone company, and is the only company in Canada licensed to provide both cellular and paging services nationwide. In December, Rogers Cantel received one of four licenses awarded by the Canadian government to provide personal communications services in Canada.
The company said it will need significant amounts of capital to build out its operations. Last year, it spent nearly $186 million, and this year, it expects to spend more than $400 million, with additional outlays in the next few years.
