Rogers Communications Inc. Announces Pricing of Public Offering of US$2.1 billion Fixed-to-Fixed Rate Subordinated Notes and Canadian Private Placement of Cdn$1.0 billion Fixed-to-Fixed Rate Subordinated Notes

Rhea-AI Summary

Rogers Communications (RCI) has announced the pricing of two major debt offerings: a US$2.1 billion U.S. public offering and a Cdn$1.0 billion Canadian private placement of fixed-to-fixed rate subordinated notes, both due 2055. The U.S. offering consists of US$1.1 billion at 7.0% and US$1.0 billion at 7.125%. The Canadian notes carry a 5.625% rate.

The net proceeds, approximately US$2.07 billion and Cdn$989 million respectively, will be used to repay existing debt and/or fund the acquisition of BCE Inc.'s indirect ownership stake in Maple Leaf Sports & Entertainment. Both offerings are expected to close on February 12, 2025.

Positive

• Successful raising of substantial capital totaling US$2.1B and Cdn$1.0B
• Strategic acquisition funding for Maple Leaf Sports & Entertainment stake
• Debt restructuring opportunity through repayment of existing indebtedness

Negative

• Significant increase in long-term debt obligations
• High interest rates (7.0%, 7.125% for US notes, 5.625% for Canadian notes)
• 30-year debt commitment until 2055

Insights

Financial Analyst

This substantial debt offering of US$2.1 billion and CAD$1.0 billion represents a significant financial move for Rogers Communications, with several key implications for investors:

The high interest rates (7.0% and 7.125% for US Notes, 5.625% for Canadian Notes) reflect both the subordinated nature of the debt and the current high-rate environment. These rates will impact Rogers' annual interest expenses by approximately $215 million, affecting future cash flows and earnings.

The strategic decision to use these funds for both debt refinancing and the MLSE acquisition demonstrates Rogers' balanced approach to capital allocation. The MLSE stake acquisition from BCE represents a valuable addition to Rogers' sports and media portfolio, potentially strengthening their content offerings and competitive position in the Canadian media landscape.

The 30-year maturity (2055) provides Rogers with long-term financing stability, though at a premium rate. The subordinated nature of these notes indicates they rank below senior debt in the capital structure, explaining the higher yield to compensate investors for increased risk.

This debt issuance follows industry trends where telecommunications companies are leveraging the current market conditions to secure long-term financing, albeit at higher rates than historical averages. The dual-currency approach (USD/CAD) helps Rogers diversify its funding sources and manage currency exposure risks.

TORONTO, Feb. 10, 2025 (GLOBE NEWSWIRE) -- Rogers Communications Inc. (TSX: RCI.A and RCI.B) (NYSE: RCI) (“RCI”) announced today that it has priced:

• a U.S. public offering of two series of US dollar denominated fixed-to-fixed rate subordinated notes with an aggregate principal amount of US$2.1 billion, consisting of US$1.1 billion of 7.0% fixed-to-fixed rate subordinated notes due 2055 and US$1.0 billion of 7.125% fixed-to-fixed rate subordinated notes due 2055 (collectively the “US Notes”), and
• a Canadian private placement of $1.0 billion of 5.625% fixed-to-fixed rate subordinated notes due 2055 (the “Cdn Notes” and, together with the US Notes, the “Notes”).

The net proceeds from the issuance of the US Notes and the issuance of the Cdn Notes will be approximately US$2.07 billion and $989 million, respectively. RCI expects to use the net proceeds from both offerings to repay certain of our outstanding indebtedness and/or fund a portion of the purchase price for RCI’s pending acquisition of BCE Inc.’s indirect ownership stake in Maple Leaf Sports & Entertainment Inc. The offering of the US Notes and the offering of the Cdn Notes are each expected to close on February 12, 2025.

The US Notes will be issued pursuant to a prospectus supplement and accompanying prospectus filed with the U.S. Securities and Exchange Commission (“SEC”) as part of an effective shelf registration statement on Form F-10. These documents are available at no charge by visiting EDGAR on the SEC website at www.sec.gov. A copy of the prospectus and prospectus supplement relating to the offering of the US Notes may also be obtained from RCI by contacting Investor Relations as described below. The US Notes are not being offered in Canada or to any resident of Canada.

The Cdn Notes will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws in the United States and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements under the Securities Act and applicable state securities laws. The Cdn Notes were offered exclusively to persons resident in a Canadian province, through a syndicate of agents on a private placement basis. The Cdn Notes will not be sold to investors outside of Canada.

This news release does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Notes in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Rogers Communications Inc.:
Rogers is Canada’s leading communications and entertainment company and its shares are publicly traded on the Toronto Stock Exchange (TSX: RCI.A and RCI.B) and on the New York Stock Exchange (NYSE: RCI). For more information, please visit rogers.com or investors.rogers.com.

Caution Concerning Forward-Looking Statements
This press release may include “forward‐looking information” and “forward-looking statements” within the meaning of applicable securities laws (collectively, “forward-looking information”). RCI cautions that forward‐looking information is inherently subject to change and uncertainty and that actual results may differ materially from those expressed or implied by the forward-looking information. A comprehensive discussion of risks associated with forward-looking information can be found in RCI’s public reports and filings, including the risks outlined in the section entitled “Risks and Uncertainties Affecting our Business” in its management’s discussion and analysis of its audited consolidated financial statements as at and for the year ended December 31, 2023, and in the section entitled “Updates to Risks and Uncertainties Affecting our Business” in its management’s discussion and analysis of its unaudited interim condensed consolidated financial statements as at and for the three and nine months ended September 30, 2024, which are available under its profile at www.sedarplus.ca, and are also available at www.sec.gov, and in the section entitled “Risk Factors” in the prospectus. RCI is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking information, whether as a result of new information, future events, or otherwise.

For further information:
Investor Relations
1-844-801-4792
investor.relations@rci.rogers.com

FAQ

What is the total value of Rogers Communications (RCI) new debt offering in February 2025?

Rogers Communications announced a total debt offering of US$2.1 billion in U.S. notes and Cdn$1.0 billion in Canadian notes.

What are the interest rates for RCI's 2025 subordinated notes?

The U.S. notes carry rates of 7.0% and 7.125%, while the Canadian notes have a 5.625% interest rate.

What will Rogers Communications use the proceeds from the 2025 debt offering for?

The proceeds will be used to repay existing debt and/or fund the acquisition of BCE Inc.'s stake in Maple Leaf Sports & Entertainment.

When will RCI's 2025 debt offerings close?

Both the U.S. and Canadian offerings are expected to close on February 12, 2025.

What is the maturity date for RCI's 2025 subordinated notes?

All notes from both offerings will mature in 2055, making them 30-year securities.