RONA INC.
TSX : RON

RONA INC.

October 13, 2006 17:14 ET

RONA Confirms the Successful Offering of Debentures

BOUCHERVILLE, QUEBEC--(CCNMatthews - Oct. 13, 2006) - RONA Inc. ("RONA") (TSX:RON), the leading Canadian distributor and retailer of hardware, home improvement and gardening products, announces that it has entered into an underwriting agreement and has filed a final prospectus with the provincial securities regulatory authorities in Canada in connection with the distribution in Canada of debentures in the aggregate principal amount of $400 million designated as "5.40% Debentures, due in 2016". The underwriters have agreed to purchase the debentures at a price of 99.792%. The effective yield of the Debentures, if held to maturity, is 5.429%. The debentures will be direct unsecured obligations of RONA and will rank pari passu with all other outstanding unsecured and unsubordinated indebtedness of RONA.

The debentures are rated BBB high (Stable) by Dominion Bond Rating Service Limited and BBB-(Positive) by Standard & Poor's, a division of the McGraw Hill Companies Inc.

Proceeds from this offering will be used to repay outstanding indebtedness, to expand its network and operations through selected acquisitions and for general corporate purposes.

The debentures will be underwritten by a group of dealers led by Scotia Capital Inc. and RBC Dominion Securities Inc. as joint Book runners, including BMO Nesbitt Burns Inc., National Bank Financial and Desjardins Securities.

"The company continues its successful foray into the capital markets. Our inaugural public offering of debentures was well over-subscribed indicating an outstanding market reception for a well priced and widely distributed issue", said Robert Dutton, RONA's president and CEO. "Not only does it optimize the balance between short term and long term interest rates, but it gives us added financial strength and depth to pursue our unique business plan with its four growth vectors: organic growth, new store construction, dealer recruitment, and acquisitions."

FORWARD-LOOKING INFORMATION

This press release contains forward-looking statements reflecting RONA's objectives, estimates and expectations. Such statements might be marked by the use of verbs such as "believe," "anticipate," "estimate" and "expect," as well as the use of the future or conditional tense. By their very nature, such statements involve risks and uncertainty. Consequently, results could differ materially from the Company's projections or expectations. For information on the nature of risk factors, the reader can consult RONA's 2005 Annual Report under the heading "Risks and Uncertainties," page 31.

ABOUT RONA

RONA is the largest Canadian distributor and retailer of hardware, home renovation and gardening products. RONA operates a network of more than 620 franchise, affiliate and corporate stores of various sizes and formats. With over 25,000 employees working under its family of banners across Canada and more than 14 million square feet of retail space, the RONA store network generates $5.6 billion in annual sales.

Contact Information

  • RONA Inc.
    Stephane Prud'homme
    Public Relations Manager
    1 877 599-5900, ext. 5114
    Cell.: 514-258-2693