Research Update: Cogeco Communications Inc. Outlook Revised To Negative On Heightened Leverage, Ratings Affirmed

Rogers Communications Inc. is selling its equity interest in Cogeco Communications Inc. (Cogeco) and its parent Cogeco Inc. to Caisse de dépôt et placement du Québec (CDPQ). CDPQ will then enter into a back-to-back transaction with Cogeco so Cogeco can repurchase some of the shares, which it will partially finance with up to C$225 million of debt. Cogeco and Cogeco Inc. plan to finance the share buybacks first with a combination of revolver borrowings and bank debt. Pro forma for the transaction, we expect Cogeco's S&P Global Ratings-adjusted debt to EBITDA will remain elevated in the high-3.0x area for the next 12-18 months. In our view, the company is highly dependent on increasing its 2025 earnings to improve its credit

...- Rogers Communications Inc. is selling its equity interest in Cogeco Communications Inc. (Cogeco) and its parent Cogeco Inc. to Caisse de dTp(t et placement du QuTbec (CDPQ). CDPQ will then enter into a back-to-back transaction with Cogeco so Cogeco can repurchase some of the shares, which it will partially finance with up to C$225 million of debt. Cogeco and Cogeco Inc. plan to finance the share buybacks first with a combination of revolver borrowings and bank debt. - Pro forma for the transaction, we expect Cogeco's S&P Global Ratings-adjusted debt to EBITDA will remain elevated in the high-3.0x area for the next 12-18 months. In our view, the company is highly dependent on increasing its 2025 earnings to improve its credit measures to levels we view as commensurate with the current rating. - Therefore, we revised our outlooks on Cogeco and its U.S. subsidiary Cogeco Communications (USA) Inc. to negative from stable and affirmed our respective '##+' and '##' issuer credit ratings. At...

Research Update