Home / Insurance Tips / Dividend pause at Rogers Communications Inc a sign of debt-equity tug of war

Dividend pause at Rogers Communications Inc a sign of debt-equity tug of war

Rogers decided to keep its quarterly dividend unchanged so it could reduce its debt load instead.

In a period where credit spreads are beginning to widen, Rogers Communications Inc. surprised the market Wednesday if this decided to keep its quarterly dividend unchanged therefore it could reduce its debt load instead.

Its class B shares tumbled 5.4 per cent Wednesday, and fell further on Thursday.

Equity analysts suspect this decision reflects, in part, pressures in the credit ratings agencies for Canadian telecom providers revisit normal borrowing metrics. A targeted leverage ratio for Rogers is between two and 2.4-times. Today, it operates at 3.1-times. Many firms have issued debt to profit from reduced rates

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