DBRS Assigns “A” Rating to Bell Canada’s Final CAD3.0 Billion Shelf Prospectus
DBRS has today assigned a rating of “A” to Bell Canada’s final $3.0 billion shelf prospectus. The ratings of Bell Canada remain Under Review with Negative Implications. The prospectus will enable Bell Canada to issue debt securities from time to time over a 25-month period in an aggregate amount of up to $3 billion. (Any issue of debt securities under this prospectus will require the filing of a prospectus supplement.)
DBRS believes that any debt issued under this prospectus would likely be unconditionally guaranteed by its parent, BCE Inc. (BCE or the Company), as is the existing Bell Canada debt. While DBRS notes that Bell Canada is not likely to issue debt in the near term under this program, BCE on a consolidated basis does have roughly $1.4 billion of debt maturing throughout the remainder of 2007. This could be repaid with the $3.25 billion of cash proceeds expected from the sale of Telesat Canada.
The ratings of Bell Canada and BCE, currently “A” and A (low), respectively, remain Under Review with Negative Implications following the Company’s announcement on April 17, 2007, where it indicated that it had initiated a review of its strategic alternatives with a view to maximize shareholder value. (See DBRS’s press release dated April 17, 2007 for more details.)
Since DBRS’s review was initiated, BCE has formed a Strategic Oversight Committee to evaluate a range of strategic alternatives. DBRS notes this includes, among other things, exploring the possibility of privatizing the Company. As such, to date BCE has entered into discussions regarding privatization with three separate consortiums. BCE expects to complete its strategic review in Q3 2007.
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All figures are in Canadian dollars unless otherwise noted.
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