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SHORT-TERM BORROWINGS | 12 Months Ended
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Dec. 31, 2017
Financial Instruments [Abstract] |
SHORT-TERM BORROWINGS | SHORT-TERM BORROWINGS Below is a summary of our short-term borrowings as at December 31, 2017 and 2016.
| As at December 31 |
(In millions of dollars) | 2017 | 2016
Accounts receivable securitization program | 650 |  | 800 |
US commercial paper program | 935 |  | — |
Total short-term borrowings | 1,585 |  | 800 |
Below is a summary of the activity relating to our short-term borrowings for the years ended December 31, 2017 and 2016.
| Year ended December 31, 2017 |  |  | Year ended December 31, 2016 |
| Notional |  | Exchange |  | Notional |  |  | Notional |  | Exchange |  | Notional |
(In millions of dollars, except exchange rates) | (US$) |  | rate |  | (Cdn$) |  |  | (US$) |  | rate |  | (Cdn$) |
Proceeds received from accounts receivable securitization |  |  | 530 |  |  |  |  | 295 |
Repayment of accounts receivable securitization |  |  | (680 | ) |  |  |  | (295 | )
Net repayment of accounts receivable securitization |  |  | (150 | ) |  |  |  | — |
Proceeds received from US commercial paper | 8,267 |  | 1.30 |  | 10,712 |  |  | — |  | — |  | — |
Repayment of US commercial paper | (7,530 | ) | 1.29 |  | (9,704 | ) |  | — |  | — |  | — |
Net proceeds received from US commercial paper | 737 |  | 1.37 |  | 1,008 |  |  |  |  | — |
Net proceeds received on short-term borrowings |  |  | 858 |  |  |  |  | — |
ACCOUNTS RECEIVABLE SECURITIZATION PROGRAM We participate in an accounts receivable securitization program with a Canadian financial institution that allows us to sell certain trade receivables into the program. As at December 31, 2017, the proceeds of the sales were committed up to a maximum of $1,050 million (2016 - $1,050 million). Effective July 8, 2016, we extended the term of the program from January 1, 2018 to January 1, 2019. Effective October 27, 2017, we further extended the term of the program to November 1, 2020.
| As at December 31 |
(In millions of dollars) | 2017 |  | 2016 |
Trade accounts receivable sold to buyer as security | 1,355 |  | 1,460 |
Short-term borrowings from buyer | (650 | ) | (800 | )
Overcollateralization | 705 |  | 660 |
| Years ended December 31 |
(In millions of dollars) | 2017 |  | 2016 |
Accounts receivable securitization program, beginning of period | 800 |  | 800 |
Net repayment of accounts receivable securitization | (150 | ) | — |
Accounts receivable securitization program, end of period | 650 |  | 800 |
We continue to service and retain substantially all of the risks and rewards relating to the accounts receivable we sell, and therefore, the receivables remain recognized on our Consolidated Statements of Financial Position and the funding received is recognized as short-term borrowings. The buyer's interest in these trade receivables ranks ahead of our interest. The program restricts us from using the receivables as collateral for any other purpose. The buyer of our trade receivables has no claim on any of our other assets. US COMMERCIAL PAPER PROGRAM In 2017, we entered into a US CP program that allowed us to issue up to a maximum aggregate principal amount of US$1 billion. In December 2017, we increased the maximum aggregate principal amount allowed under our US CP program to US$1.5 billion. Funds can be borrowed under this program with terms to maturity ranging from 1 to 397 days, subject to ongoing market conditions. Any issuances made under the US CP program will be issued at a discount. Borrowings under our US CP program are classified as short-term borrowings on our Consolidated Statements of Financial Position when they are due within one year from the date of the financial statements.
| Year ended December 31, 2017 |
| Notional |  | Exchange |  | Notional |
(In millions of dollars, except exchange rates) | (US$) |  | rate |  | (Cdn$) |
US commercial paper, beginning of period | — |  | — |  | — |
Net proceeds received from US commercial paper | 737 |  | 1.37 |  | 1,008 |
Discounts on issuance 1 | 9 |  | 1.33 |  | 12 |
Gain on foreign exchange 1 |  |  | (85 | )
US commercial paper, end of period | 746 |  | 1.25 |  | 935 |
1 Included in finance costs. Concurrent with the commercial paper issuances, we entered into debt derivatives to hedge the foreign currency risk associated with the principal and interest components of the borrowings under the US CP program (see note 16). We have not designated these debt derivatives as hedges for accounting purposes. LONG-TERM DEBT
|  |  |  |  | As at December 31 |
(In millions of dollars, except interest rates) | Due date |  | Principal amount |  | Interest rate |  | 2017 |  | 2016 |
Bank credit facilities (Cdn$ portion) |  |  |  | Floating |  | — |  | 100 |
Bank credit facilities (US$ portion) |  | US |  | Floating |  | — |  | 201 |
Senior notes | 2017 |  | 250 |  | Floating |  | — |  | 250 |
Senior notes | 2017 |  | 500 |  | 3.000 | % | — |  | 500 |
Senior notes | 2018 | US | 1,400 |  | 6.800 | % | 1,756 |  | 1,880 |
Senior notes | 2019 |  | 400 |  | 2.800 | % | 400 |  | 400 |
Senior notes | 2019 |  | 500 |  | 5.380 | % | 500 |  | 500 |
Senior notes | 2020 |  | 900 |  | 4.700 | % | 900 |  | 900 |
Senior notes | 2021 |  | 1,450 |  | 5.340 | % | 1,450 |  | 1,450 |
Senior notes | 2022 |  | 600 |  | 4.000 | % | 600 |  | 600 |
Senior notes | 2023 | US | 500 |  | 3.000 | % | 627 |  | 671 |
Senior notes | 2023 | US | 850 |  | 4.100 | % | 1,066 |  | 1,141 |
Senior notes | 2024 |  | 600 |  | 4.000 | % | 600 |  | 600 |
Senior notes | 2025 | US | 700 |  | 3.625 | % | 878 |  | 940 |
Senior notes | 2026 | US | 500 |  | 2.900 | % | 627 |  | 671 |
Senior debentures 1 | 2032 | US | 200 |  | 8.750 | % | 251 |  | 269 |
Senior notes | 2038 | US | 350 |  | 7.500 | % | 439 |  | 470 |
Senior notes | 2039 |  | 500 |  | 6.680 | % | 500 |  | 500 |
Senior notes | 2040 |  | 800 |  | 6.110 | % | 800 |  | 800 |
Senior notes | 2041 |  | 400 |  | 6.560 | % | 400 |  | 400 |
Senior notes | 2043 | US | 500 |  | 4.500 | % | 627 |  | 671 |
Senior notes | 2043 | US | 650 |  | 5.450 | % | 816 |  | 873 |
Senior notes | 2044 | US | 1,050 |  | 5.000 | % | 1,318 |  | 1,410 |
|  |  |  |  | 14,555 |  | 16,197 |
Deferred transaction costs and discounts |  |  |  |  | (107 | ) | (117 | )
Less current portion |  |  |  |  |  |  | (1,756 | ) | (750 | )
Total long-term debt |  |  |  |  |  |  | 12,692 |  | 15,330 |
1 | Senior debentures originally issued by Rogers Cable Inc. which are unsecured obligations of RCI and for which RCCI was an unsecured guarantor as at December 31, 2017 and 2016.
Each of the above senior notes and debentures are unsecured and, as at December 31, 2017, were guaranteed by RCCI, ranking equally with all of RCI's other senior notes, debentures, bank credit facilities, and letter of credit facilities. We use derivatives to hedge the foreign exchange risk associated with the principal and interest components of all of our US dollar-denominated senior notes and debentures (see note 16). The tables below summarize the activity relating to our long-term debt for the years ended December 31, 2017 and 2016.
| Year ended December 31, 2017 |  |  | Year ended December 31, 2016 |
(In millions of dollars, except exchange rates) | Notional |  | Exchange |  | Notional |  |  | Notional |  | Exchange |  | Notional |
(US$) |  | rate |  | (Cdn$) |  |  | (US$) |  | rate |  | (Cdn$) |
Credit facility borrowings (Cdn$) |  |  |  | 1,730 |  |  |  |  | 1,140 |
Credit facility borrowings (US$) | 960 |  | 1.32 |  | 1,269 |  |  | 2,188 |  | 1.31 |  | 2,877 |
Total credit facility borrowings |  |  | 2,999 |  |  |  |  | 4,017 |
Credit facility repayments (Cdn$) |  |  | (1,830 | ) |  |  |  | (1,540 | )
Credit facility repayments (US$) | (1,110 | ) | 1.31 |  | (1,453 | ) |  | (2,038 | ) | 1.32 |  | (2,686 | )
Total credit facility repayments |  |  | (3,283 | ) |  |  |  | (4,226 | )
Net repayments under credit facilities |  |  | (284 | ) |  |  |  | (209 | )
Senior note issuances (US$) | — |  | — |  | — |  |  | 500 |  | 1.34 |  | 671 |
Senior note repayments (Cdn$) |  |  | (750 | ) |  |  |  | (1,000 | )
Net repayment of senior notes |  |  | (750 | ) |  |  |  | (329 | )
Net repayment of long-term debt |  |  | (1,034 | ) |  |  |  | (538 | )
|  | Years ended December 31 |
(In millions of dollars) |  | 2017 |  | 2016 |
Long-term debt net of transaction costs, beginning of period |  | 16,080 |  | 16,870 |
Net repayment of long-term debt |  | (1,034 | ) | (538 | )
Gain on foreign exchange |  | (608 | ) | (245 | )
Deferred transaction costs incurred |  | (3 | ) | (12 | )
Amortization of deferred transaction costs |  | 13 |  | 5 |
Long-term debt net of transaction costs, end of period |  | 14,448 |  | 16,080 |
WEIGHTED AVERAGE INTEREST RATE As at December 31, 2017, our effective weighted average interest rate on all debt and short-term borrowings, including the effect of all of the associated debt derivative and bond forward instruments, was 4.70% (2016 - 4.72%). BANK CREDIT AND LETTER OF CREDIT FACILITIES Our $3.2 billion revolving credit facility is available on a fully revolving basis until maturity and there are no scheduled reductions prior to maturity. The interest rate charged on borrowings from the revolving credit facility ranges from nil to 1.25% per annum over the bank prime rate or base rate, or 0.85% to 2.25% over the bankers' acceptance rate or London Inter-Bank Offered Rate. In 2017, we amended our revolving credit facility to, among other things, extend the maturity date of the original $2.5 billion facility from September 2020 to March 2022. In addition, we added a $700 million tranche to the facility that matures in March 2020. As a result, the total credit limit for the facility is now $3.2 billion. In 2017, we repaid the entire balance that was outstanding under our non-revolving bank credit facility. As a result of this repayment, this facility was terminated. Effective April 1, 2016, we amended our $2.5 billion revolving credit facility to, among other things, extend the maturity date from July 2019 to September 2020. At the same time, we also amended the $1.0 billion non-revolving credit facility to, among other things, extend the maturity date from April 2017 to April 2018. As a result of the repayments made during 2016, we reduced the amount of borrowings available under our non-revolving credit facility from $1.0 billion to $301 million. As at December 31, 2017, we had nil drawn under our bank credit facilities (2016 - $301 million ($100 million and US$150 million)). We had entered into debt derivatives related to the US dollar-denominated portion of these borrowings to convert all the interest and principal payment obligations to Canadian dollars (see note 16) as at December 31, 2016. As at December 31, 2017, we had available liquidity of $2.3 billion (2016 - $2.4 billion) under our $3.3 billion bank and letter of credit facilities (2016 - $2.9 billion), of which we had utilized $0.1 billion (2016 - $0.4 billion) and reserved $0.9 billion to backstop amounts outstanding under our US CP program borrowings (2016 - nil). SENIOR NOTES AND DEBENTURES We pay interest on all of our fixed-rate senior notes and debentures on a semi-annual basis. We paid interest on our floating rate senior notes on a quarterly basis. We have the option to redeem each of our fixed-rate senior notes and debentures, in whole or in part, at any time, if we pay the premiums specified in the corresponding agreements. Issuance of senior notes Below is a summary of the senior notes that we issued in 2016. We did not issue any senior notes in 2017.
(In millions of dollars, except interest rates and discounts) |  |  |
Date Issued |  | Principal amount |  | Due date | Interest rate |  | Discount/ premium at issuance |  | Total gross proceeds 1 (Cdn$) |  | Transaction costs and discounts 2 (Cdn$) |
2016 issuances |  |  |  |  |  |  |
November 4, 2016 | US | 500 |  | 2026 | 2.900 | % | 98.354 | % | 671 |  | 17 |
1 | Gross proceeds before transaction costs and discounts.
2 | Transaction costs and discounts are included as deferred transaction costs and discounts in the carrying value of the long-term debt, and recognized in net income using the effective interest method.
Concurrent with the 2016 issuance, we entered into debt derivatives to convert all interest and principal payment obligations to Canadian dollars (see note 16). On February 8, 2018, we issued US$750 million senior notes due 2048 at a rate of 4.300%. At the same time, we entered into debt derivatives to convert all interest and principal payment obligations to Canadian dollars. As a result, we received net proceeds of $938 million from the issuance. We intend to use these funds for general corporate purposes, which may include the repayment at maturity of our outstanding commercial paper under our US CP program. Repayment of senior notes and related derivative settlements Below is a summary of the repayment of our senior notes during 2017 and 2016. There were no debt derivatives associated with these repayments.
(In millions of dollars)
Maturity date | Notional amount (Cdn$) |
2017 repayments |
March 2017 | 250 |
June 2017 | 500 |
Total for 2017 | 750 |
2016 repayments |
May 2016 | 1,000 |
PRINCIPAL REPAYMENTS Below is a summary of the principal repayments on our long-term debt due in each of the next five years and thereafter as at December 31, 2017.
(In millions of dollars) |
2018 | 1,756 |
2019 | 900 |
2020 | 900 |
2021 | 1,450 |
2022 | 600 |
Thereafter | 8,949 |
Total long-term debt | 14,555 |
TERMS AND CONDITIONS As at December 31, 2017 and 2016, we were in compliance with all financial covenants, financial ratios, and all of the terms and conditions of our long-term debt agreements. There were no financial leverage covenants in effect other than those under our bank credit and letter of credit facilities. The 8.75% debentures due in 2032 contain debt incurrence tests and restrictions on additional investments, sales of assets, and payment of dividends, all of which are suspended in the event the public debt securities are assigned investment-grade ratings by at least two of three specified credit rating agencies. As at December 31, 2017, these public debt securities were assigned an investment-grade rating by each of the three specified credit rating agencies and, accordingly, these restrictions have been suspended as long as the investment-grade ratings are maintained. Our other senior notes do not have any of these restrictions, regardless of the related credit ratings. The repayment dates of certain debt agreements can also be accelerated if there is a change in control of RCI.

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