CanWest Global Communications closed a $400 million (C$429 million in Canadian dollars) bond offering today.
The notes, which will rank subordinated to the company’s senior debt, mature in August of 2015 and carry an interest rate of 9.25%.The company plans to use the $392 million (C$420 million) in proceeds from the transaction to refinance existing debt. Specifically, CanWest will combine the funds from the bond offering with funds from new C$1.015 billion secured credit facilities entered into with the Bank of Nova Scotia (BNS) and Citi to replace a C$1.3 billion short term loan provided by BNS. The banks also committed to a C$75m credit facility that is not secured and ranks subordinated to senior debt alongside the new bonds.
The initial short term loan was taken to buy back for $495 million the 26% stake held by CanWest MediaWorks Income Fund in CanWest MediaWorks LP, the largest newspaper publisher in Canada, and to ultimately wind up the operations of the fund. CanWest Global held the other 74% stake in CanWest MediaWorks LP.
CanWest MediaWorks Income Fund is an open-ended income trust that would allow investors to participate directly in the newspaper publishing operation which include The Ottawa Citizen and The Calgary Herald.
Winnipeg-based CanWest Global Communications is a diversified media company with assets in the areas of television and radio broadcasting and publishing.
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