The notes rank junior to the Company’s senior credit facility - these senior notes were junior at paid an interest rate of 12.125 before Canwest paid these bondholders to reduce the interest rate and made them senior -- vendor financing bonds, and include earnings and derivative swap agreements .
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CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED AUGUST 31, 2007 AND 2006
4) US$761.1 million Senior Subordinated notes are due in 2012 and bear interest at 8.0%. The notes rank junior to the Company’s senior credit facility and are guaranteed by certain subsidiaries of the Company. The notes are redeemable at par at the Company’s option on or after September 15, 2011. The Company has entered into a US$761.1 million foreign currency interest rate swap resulting in floating interest rates on these notes at interest rates based on bankers acceptance rates plus a fixed margin and a fixed currency exchange rate of US$1:$1.1932 until September 2012.
(5) On October 13, 2005 the Limited Partnership obtained credit facilities in the amount of $1
billion consisting of an $825 million non-revolving term credit facility and a $175 million revolving term credit facility. These credit facilities bore interest based on banker’s acceptance rates plus a margin. On July 13, 2007 this debt with a book value of $825 million was retired for $825 million cash. Deferred financing costs of $5.4 million relating to this debt were written off. The Limited Partnership also settled associated interest rate swap contracts for cash proceeds of $22.5 million and recorded a gain of $22.5 million which has been classified as interest rate and foreign currency swap gain.
On July 13, 2007 the Limited Partnership entered into a new Senior Secured Credit facility, which is secured by substantially all of the assets of the Limited Partnership. The facility includes:
(a) $250 million revolving term loan. As at August 31, 2007, the Limited Partnership had drawn $85 million on its revolver and had available $164 million, net of letters of credit of $1 million. This facility matures on July 13, 2012 and is subject to certain restrictions. This facility bears interest at prime plus a margin or banker’s acceptance rates plus a margin.
(b) A $265 million non-revolving term loan which is subject to minimum principal payment reductions of a minimum of 5% in year 3 and 10% in each of years 4 and 5. This facility which matures on July 13, 2012 is subject to certain restrictions and bears interest at banker’s acceptance rates plus a margin.
(c) A US$466 million term loan which is subject to principal repayments of $5 million (US$4.8 million) per year. This facility matures on July 13, 2014 and is subject to certain restrictions and bears interest at floating interest rates based on LIBOR rates plus a margin. The Limited Partnership has entered into a foreign currency interest rate swap to fix the interest and principal payment on a notional amount of US$466 million, reduced accordingly as the principal portion of the debt is repaid, resulting in an effective interest rate of 7.50% and a fixed currency exchange of US$1:$1.0725 until July 2014.
(7) On July 13, 2007, the Limited Partnership entered into a $75 million senior subordinated unsecured credit facility. This unsecured facility ranks junior to the Company’s senior credit facilities and is guaranteed by certain subsidiaries of the Limited Partnership. This facility which matures on July 13, 2015 is subject to certain restrictions and bears interest at banker’s acceptance rates plus a margin.
