Manitoba Tel takes on debt

Article Excerpt

MANITOBA TELECOM SERVICES $34.38 (Toronto symbol MBT; Shares outstanding: 64.7 million; Market cap: $2.2 billion; SI Rating: Average) has issued $200 million of new 10-year bonds, yielding 5.625%. The company will probably use part of the cash to help pay for a new high-speed wireless network that it is building in Manitoba in partnership with Rogers Communications Inc. (Toronto symbol RCI.B). Manitoba Telecom will spend $70 million on this new network, which should be ready by early 2011. The company also plans to spend $40 million over the next three years on upgrading its billing systems. This alliance with Rogers will let Manitoba Telecom offer more phones and services to its cellular customers. As well, it can use Rogers’ network to sell more wireless services to its business clients outside of Manitoba. As of September 30, 2009, Manitoba Telecom’s long-term debt was $853.9 million. If you add the proceeds from the bond sale, its long-term debt is about 39% of its market cap…