The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Cable Bahamas has been sounding out the Bahamian capital markets to gauge investor appetite for a proposed preference share offering, which sources said is likely to be launched in April/May this year.

Barry Williams, Cable Bahamas’ senior vice-president of finance, confirmed to Tribune Business that the company had spoken to several key players, but nothing had been finalised yet.

“We had talked to a couple of people over the last couple of months,” he said, “but we don’t have anything concrete. We haven’t formalised anything yet.”

This matches Tribune Business’s information, which is that the BISX-listed communications provider has yet to tie down key details - the amount of capital to be raised; the interest rate coupon investors will receive; and the timing of any issue.

However, this newspaper’s sources said a capital raising by Cable Bahamas - likely the first major issue to hit the capital markets in 2014 - was more a question of ‘when’, not ‘if’. Tribune Business has been told it will likely launch in the second quarter, with a post-Easter date in May most likely.

Some kind of debt issue - bonds and preference shares - has always been on the cards since Cable Bahamas completed its $100 million worth of Florida acquisitions in late 2013.

The company hinted at such action at the time, with the proceeds from any capital raising likely to be used to take out a portion of the bank debt that Cable Bahamas employed to finance its Florida expansion.

Mr Williams confirmed the company’s long-held intentions, adding: “We’ve had a couple of conversations with a couple of folks. Those have really been ongoing from last year.

“We have an interest in it, but there are no details I can release.”

Cable Bahamas undertook a $135 million refinancing of its senior credit facility to help fund its Florida deals. This features a $100 million term loan, $15 million revolving credit facility and a $20 million incremental credit facility.

Interest payments are based on the London Inter-Bank Offering Rate (LIBOR), and the syndicate behind it features involved RBC Capital Markets, Scotiabank (Bahamas) and CoBank, headquartered in Denver, Colorado. RBC Capital Markets acted items as sole lead arranger and bookrunner for the cross-border facilities in the transaction.

Outlining the rationale for its bid to acquire Summit Broadband, Marco Island Cable/Nu Vu and US Metropolitan Telecom, Cable Bahamas previously projected that by 2017, its Florida interests would account for 31.7 per cent of total EBITDA.

It has forecast that the acquisitions will see it achieve compound annual growth rates for revenue and EBITDA (operating income) of 9.6 per cent and 11.8 per cent, respectively, for the five years to end-2017.

This compared to revenue and earnings before interest, taxation, depreciation and amortisation (EBITDA) growth forecasts of 2.3 per cent and 4 per cent, respectively, if Cable Bahamas’ remained a Bahamian-centric company.

Meanwhile, Mr Williams said Cable Bahamas was “in the early stages” of determining how the Government’s proposed Value-Added Tax (VAT) will affect it, and what it needs to do to comply.

Anticipating that its services - fixed-line voice, Internet and cable TV - would have to levy 15 per cent on customers “across the board” except for ‘exempt’ items, Mr Williams told Tribune Business: “In another couple of weeks, we will have a very good idea of the impact and whether we will need to anything materially different from what we are doing now.”