Spurred by the company’s rising stock price, more than 99% of eligible Rogers Communications bondholders have swapped their bonds for stock.
As a result, Rogers has decreased its debt load by almost C$200 million ($136 million), the company announced Thursday.
“We have a stated goal of improving the balance sheet of the company such that we would receive an investment grade rating on our debt within four years,” said David Robinson, Rogers’ VP of financial planning and investor relations. “This is a step in the right direction.”
More than 99% of those holding Rogers’ 7.5% convertible debentures have traded them for non-voting shares as opposed to cashing them in. About $134.8 million of RCI debt has been converted into approximately 9.6 million Class B Non-Voting shares, while about $570,900 has been set aside for redemption.
Debt holders are taking advantage of a surge in the value of Rogers’ shares, which were trading Thursday at $19.36. At the conversion ratio of 48.276 shares for each bond that sold originally for $679.20, bondholders have been “in the money” since shares passed $14.07, Robinson said.
Rogers’ total debt stands at about $3.4 billion.
Toronto-based Rogers Communications is a Canadian communications company engaged in cellular, digital PCS, paging and data communications; in cable television, high-speed Internet access and video retailing; and in radio and television broadcasting, tele-shopping, publishing and new media businesses.