The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Cable Bahamas’s financial advisor yesterday said the company had set “a milestone for the capital markets” after its preference share issue was 14..5 per cent oversubscribed, raising a total $114.5 million from institutional and high net worth investors.

Michael Anderson, RoyalFidelity Merchant Bank & Trust’s president, told Tribune Business that the final total had exceeded even his pre-closing day estimates, as investors kicked in sums of between $0.5-$1 million in the final hours.

With $57 million, or 95 per cent of Cable Bahamas’s existing preference shareholders ‘rolling over’ their investments into the newly-created securities, Mr Anderson said the BISX-listed communications provider had effectively raised $57-$58 million in ‘new money’.

He described the latter figure as a ‘record’ for the Bahamian capital markets in terms of a private debt offering, beating the previous $45 million mark ($48 million in received subscriptions) set for the Public Hospitals Authority (PHA) bond issue last year. The $114.5 million total is almost $70 million higher.

The previous ‘private company’ record was also previously held by Cable Bahamas at $40 million, and Mr Anderson said Cable Bahamas’s extra $58 million also came close to the record $62.5 million equity offering by Commonwealth Brewery in 2011.

And the RoyalFidelity president attributed the Cable Bahamas issue’s success to a combination of high market liquidity and relatively low returns on alternative investments, plus the company’s track record of strong financial performance.

“Those are the perfect conditions in which to go out and raise money,” Mr Anderson told Tribune Business. “It’s a milestone for the capital markets in terms of the size of the offer. We’ve never passed $100 million for an offer before.”

The bulk of the subscriptions came in the $103.5 million allocated by investors to Cable Bahamas’s Series 6, Bahamian dollar preference shares that carry an interest coupon of 5.75 per cent.

The sum raised was 29.3 per cent higher than the company’s targeted $80 million, although it is accepting all subscriptions.

The only mild disappointment was that Cable Bahamas achieved only 55 per cent of its US dollar preference share target, gaining $11 million instead of $20 million for the Series 8 preference shares with a 6.25 per cent yield.

Mr Anderson suggested the relatively low p;anticipation rate was due to a combination of relatively low US dollar supply in the Bahamian market, coupled with better returns and higher liquidity in other investment options.

The $114.5 million raised both redeemed Cable Bahamas’s $60 million Series 4 and Series 5 preference shares, while providing $54.5 million to settle short-term debt commitments and fund the company’s expansion. It is unclear how, and if, the lower US dollar amount raise will impact funding for the newly-acquired Florida operations.

Anthony Butler, Cable Bahamas’ president and chief executive, said in a statement: “The success of the offering, the largest private debt placement ever by a Bahamian company, sets Cable Bahamas in a strong financial position.

“We are looking forward to great things and we are poised to take advantage of the growth opportunities before us.”

Mr Anderson reiterated: “The ability to raise $114.5 million in the Bahamas capital markets reflects both the support for Cable Bahamas’ initiatives in Florida as well as the huge level of confidence which the company has created over its 19 years in business.”

Barry Williams, Cable Bahamas’s senior vice-president of finance, added: “The company was very pleased with the support that the Bahamas market has once again demonstrated.

“Our existing preferred shareholders responded resoundingly with approximately 95 per cent rolling their existing holdings, some taking increased positions in the new offering, and we are always pleased to welcome new investors into our portfolio.

“With the preferred financing now completed and in place, we are well positioned to complete our expansion programmes inclusive of our Florida growth opportunities and any Bahamian opportunities that may arise in the near term.”

The market areas of focus in Florida provide Cable Bahamas with access to over 3.2 million people, 1.5 million households, 121,000 hotel rooms and a myriad of commercial establishments.

The funding will support Cable Bahamas achieving its 2014 forecast revenues of $154 million, which will represent a $35 million, or 29 per cent, increase over the 2013 results.

The 2014 forecast EBITDA is also expected to reach $59 million, which will be an increase of $9 million or 18 per cent over 2013.

For the first quarter of 2014 total revenues reached over $37 million, an increase of $9 million over the same period of 2013, and EBITDA for the first quarter reached $14 million, and was $2 million or 17 per cent higher than the 2013 first quarter.