Rogers Communications Inc. Announces Pricing of US$2.5 billion Offering of US Dollar Senior Notes

Rhea-AI Summary

Rogers Communications Inc. (RCI) has priced a public offering of two series of US dollar senior notes with an aggregate principal amount of US$2.5 billion. The net proceeds will be approximately US$2.46 billion, which RCI plans to use to repay certain outstanding indebtedness, including borrowings used to fund its acquisition of Shaw Communications Inc. The sale of the Notes is expected to close on February 9, 2024. The Notes will be issued pursuant to a prospectus supplement and accompanying prospectus filed with the SEC as part of an effective shelf registration statement on Form F-10.

Financial Analyst

From a financial perspective, the issuance of senior notes by Rogers Communications Inc. (RCI) is a significant event. The aggregate principal amount of US$2.5 billion indicates a substantial capital raise, which can greatly affect the company's leverage and interest expense. The detailed rates of 5.00% and 5.30% for notes maturing in 2029 and 2034, respectively, are reflective of the current interest rate environment and RCI's creditworthiness.

The decision to use the net proceeds to repay existing debt, particularly the term loan associated with the Shaw Communications acquisition, suggests a strategic move to manage the company's debt profile and potentially reduce interest costs. Investors should consider how this refinancing might improve RCI's balance sheet efficiency and whether the new debt structure aligns with the company's long-term financial strategy.

Market Research Analyst

Examining the market implications, RCI's public offering could signal to investors the company's confidence in its future cash flows, as it is able to commit to fixed interest payments over the coming years. The exclusion of Canadian residents from the offering is a strategic choice, possibly due to regulatory considerations or market saturation. It may also reflect a diversification of the investor base, which can be beneficial for the company.

Furthermore, the interest rates on the notes could be compared to industry standards to gauge investor sentiment towards RCI's financial health. A higher interest rate might suggest a perceived higher risk by the market, whereas a lower rate could indicate a strong confidence in RCI's creditworthiness.

Debt Capital Markets Expert

From a capital markets standpoint, the issuance of senior notes is a key event that showcases RCI's access to the debt capital markets and its ability to secure funding at competitive rates. The use of a shelf registration statement on Form F-10 expedites the process, demonstrating RCI's preparedness and regulatory compliance in the United States.

The fixed interest rates locked in for the next 10 and 15 years respectively could be advantageous if interest rates rise in the future, protecting RCI from higher borrowing costs. However, if rates were to decrease, RCI would face an opportunity cost. The closing of the sale on a specified date indicates a swift execution of the offering, minimizing the time risk associated with changing market conditions.

TORONTO, Feb. 07, 2024 (GLOBE NEWSWIRE) -- Rogers Communications Inc. (TSX: RCI.A and RCI.B) (NYSE: RCI) (“RCI”) announced today that it has priced a public offering of two series of US dollar senior notes with an aggregate principal amount of US$2.5 billion, consisting of US$1.25 billion of 5.00% senior notes due 2029 and US$1.25 billion of 5.30% senior notes due 2034 (collectively, the “Notes”). The net proceeds from the issuance will be approximately US$2.46 billion. RCI expects to use the net proceeds from the issuance to repay certain of its outstanding indebtedness, including a portion of the borrowings under its term loan facility used to partially fund its acquisition of Shaw Communications Inc. The sale of the Notes is expected to close on February 9, 2024.

The Notes will be issued pursuant to a prospectus supplement and accompanying prospectus filed with the 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 Notes may also be obtained from RCI by contacting Investor Relations as described below.

The Notes are not being offered in Canada or to any resident of Canada. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

About Rogers Communications Inc.

Rogers is Canada’s leading wireless, cable and media company that provides connectivity and entertainment to Canadian consumers and businesses across the country. Rogers shares are publicly traded on the Toronto Stock Exchange (TSX: RCI.A and RCI.B) and on the New York Stock Exchange (NYSE: RCI).

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, 2022, 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, 2023, 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 statements, whether as a result of new information, future events, or otherwise.

For more information:

Rogers Communications media contact
Sarah Schmidt
647.643.6397
media@rci.rogers.com 

Rogers Communications investment community contact
Paul Carpino
647.435.6470
paul.carpino@rci.rogers.com

What is the aggregate principal amount of the senior notes offered by RCI?

The aggregate principal amount of the senior notes offered by RCI is US$2.5 billion.

What will RCI use the net proceeds from the issuance for?

RCI plans to use the net proceeds from the issuance to repay certain outstanding indebtedness, including borrowings used to fund its acquisition of Shaw Communications Inc.

When is the sale of the Notes expected to close?

The sale of the Notes is expected to close on February 9, 2024.

Where can the prospectus and prospectus supplement relating to the offering of the Notes be obtained?

The prospectus and prospectus supplement can be obtained from RCI by contacting Investor Relations or by visiting EDGAR on the SEC website at www.sec.gov.

Are the Notes being offered in Canada?

No, the Notes are not being offered in Canada or to any resident of Canada.