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Rogers launches $1.5bn senior notes offering

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Canadian telco Rogers Communications has announced the issue of a CAD$1.5 billion debt security offering.

The CAD$1.5 billion offering represents 3.65% senior notes due 2027, the net proceeds of which the company says it will use to the company estimates at approximately $1.484 billion. 

Rogers says it will use the proceeds of the sale for ‘general corporate purposes’, which may include the repayment short-term debt or other borrowings.

The sale of the notes is expected to close on March 31, 2020.

The senior notes offering follows the company’s 2019 annual report. Highlights include:

  • Wireless and Cable service revenue growth of 1%, offset by a 4% decline in Media revenue.

  • Adjusted EBITDA increased 4% in 2019, with a consolidated adjusted EBITDA margin of 41.2%.

  • Specifically, cable revenue increased by 1% as a result of the 7% increase in Internet revenue, due to the general movement of customers to higher speed and usage tiers.

  • Media revenue decreased as a result of the sale of our publishing business during the year and lower revenue at the Toronto Blue Jays.

  • Net income decreased 1% and adjusted net income decreased 5% largely as a result of higher depreciation and amortization and higher finance costs.

  • Due to the company’s free cash flow the company has continued to ‘making investments in our network and returning substantial capital to shareholders through dividends and our normal course issuer bid (NCIB) programs’.

Earlier this year and during the company’s Q4 2019 earnings call, Joe Natale Roger’s president and chief executive officer confirmed that the Canadian telco plans on spending approximately $3 billion in 2020 “to build Canada’s communication infrastructure”.

However, this investment is at risk according to Natale, as there isn’t the right regulation.

“As we enter the world of 5G, regulatory certainty is critical to investment,” he said. “We need regulation that encourages investment and fuels innovation. Punitive regulation will slow or worse stall 5G deployment. And expansion of rural connectivity will happen at a snail's pace, if at all.”

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