By Andrew Willis
Long a U.S. dollar bond issuer, Rogers Communications (RCI) is now embracing Canadian markets with a vengeance, with is second $1 billion financing of the year.
Rogers launched the sale of $500 million worth of 10-year and 30-year bonds early Wednesday, a deal that follows on a well-received $1 billion seven-year debt offering in May.
RBC Dominion Securities and Scotia Capital are leading the underwriting, and the price and interest rate on two bond issues is expected to be set by the end of Wednesday’s trading session.
Bond traders say the investment bankers and Rogers are marketing the 10-year bonds with a yield that will be 190 basis points over the comparable government of Canada debt, while the 30-year debentures will yield something in the neighbourhood of 275 basis points over government of Canada bonds.
A generation back, Rogers financed its wireless and cable expansion with U.S. high yield debt, a move that reflected relatively weak Canadian investor interest in a company that boasted non-investment grade credit ratings.
Rogers now boasts a relatively strong, investment-grade balance sheet - one of late founder Ted Rogers’ many achievements - and is able to borrow in Canadian markets. The new, Canadian-dollar financings come with lower rates and no currency risk, two big pluses for the company.
In total, Rogers has net debt in the $8 billion range, with $7 billion of this debt denominated in U.S. dollars. The company hedges more than 90% of this exposure.