DBRS Morningstar Assigns Rating of BBB (low), RR1, Stable Trend on Cogeco Communications Inc.’s Senior Secured Notes

DBRS Limited (DBRS Morningstar) assigns a rating of BBB (low), RR1 with a Stable trend to Cogeco Communications Inc.’s (Cogeco or the Company) private offering of $500 million 2.991% Senior Secured Notes due 2031 (the Notes). The rating being assigned is based upon the rating on an already-outstanding series of the above-mentioned debt instrument.

The Notes and the related Guarantees will be direct and unsubordinated secured debt obligations of Cogeco and the Guarantors and will rank equally and pari passu, without discrimination, preference, or priority, including with respect to security interests, with all other existing and future secured Senior Indebtedness outstanding from time to time. The Notes will be issued under the Company’s new 2021 trust indenture and will be fully and unconditionally guaranteed by the Guarantors cited in the trust indenture.

DBRS Morningstar expects the Company to use an amount equal to the net proceeds from this offering to fund spectrum auction spend, to repay existing indebtedness under the Term Revolving Facility (which can be drawn again to repay at maturity the $200 million aggregate principal amount of outstanding 4.925% senior secured debentures due February 14, 2022), and for other general corporate purposes.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/373262.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The principal methodologies are Rating Companies in the Communications Industry (July 27, 2021; https://www.dbrsmorningstar.com/research/382119) and DBRS Morningstar Criteria: Recovery Ratings for Non-Investment-Grade Corporate Issuers (August 19, 2021; https://www.dbrsmorningstar.com/research/383238), which can be found on dbrsmorningstar.com under Methodologies & Criteria. Other applicable methodologies include the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (February 3, 2021; https://www.dbrsmorningstar.com/research/373262).

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883.

Generally, the conditions that lead to the assignment of a Negative or Positive trend are resolved within a 12-month period. DBRS Morningstar trends and ratings are under regular surveillance.

For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at [email protected].

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