DBRS Upgrades Rogers Cable to BBB (low), Stable Trend

DBRS has today upgraded the rating of the Senior Secured Notes & Debentures of Rogers Cable Inc. (Rogers Cable or the Company) to BBB (low) from BB (high). The trend is now Stable. The rating change follows the upgrade of the Company to BB (high) with a Positive trend on December 21, 2006.

DBRS has also upgraded the ratings of Rogers Wireless Inc. (Rogers Wireless) to BBB (low) and BB (high), and the parent of both companies, Rogers Communications Inc. (RCI), to BB (high). (See separate press releases for both Rogers Wireless and RCI.)

The upgrade reflects continued strong improvements to Rogers Cable’s credit profile, driven by a solid performance in the Company’s core cable and Internet segments, and continued improvements in the entire Rogers group of companies. Additionally, on a go-forward basis, DBRS expects Rogers Cable to continue to improve its key credit metrics, with external gross debt-to-EBITDA of roughly 2.6 times and cash flow-to-debt exceeding approximately 0.28 times by the end of 2007. In addition to EBITDA growth, DBRS notes the Company has repaid $450 million in notes, which matured on February 6, 2007.

DBRS expects the Company to continue to improve its free cash flow deficit, which was reduced to approximately $325 million for 2006, and was funded through free cash generation at Rogers Wireless. DBRS anticipates the Company’s free cash flow deficit will improve to roughly $150 million by the end of 2007 as a result of strong growth in cash flow from operations and the elimination of a dividend payable to RCI ($72 million per year). This will be offset by higher capital expenditures related to growth in its core cable-subscriber base and the support of its expansion into the business services market.

DBRS expects continued improvement in the Company’s financial ratios attributable to operating performance and strong execution. However, DBRS does not anticipate further significant debt reduction at Rogers Cable in the near term. DBRS will continue to view the Company’s credit profile in conjunction with that of Rogers Wireless and RCI. From a consolidated perspective, DBRS notes RCI is expected to generate nearly $1 billion in positive free cash flow in 2007 (including cash tax savings), with a strong contribution from Rogers Wireless.

Note:
All figures are in Canadian dollars unless otherwise noted.
This rating is based on public information.