DBRS Places Ratings of BCE Acquisition Inc., BCE Inc. and Bell Canada Under Review with Developing Implications

DBRS has today placed its ratings of BCE Acquisition Inc. (BAI), BCE Inc. and Bell Canada, a wholly owned subsidiary of BCE Inc. (BCE or the Company) Under Review with Developing Implications. This action follows BCE’s announcement today that based on preliminary indications it is unlikely that a condition – specifically, a positive solvency opinion – that was required upon closing the privatization of BCE on December 11, 2008, will be met.

DBRS notes that should the privatization not proceed as planned, DBRS expects to re-evaluate BCE and Bell Canada’s credit profiles and likely move the ratings of these entities to a strong investment-grade level.

Alternatively, should the privatization proceed as planned, DBRS’s current BB (low) issuer ratings on BAI and Bell Canada would remain in place. (See press release dated October 7, 2008.) However, should any element of the privatization change, DBRS would re-evaluate the appropriateness of these BB (low) issuer ratings.

DBRS notes that the $52 billion privatization of BCE was originally announced on June 30, 2007, and led by Ontario Teachers’ Pension Plan Board, Providence Equity Partners Inc. and Madison Dearborn Partners, LLC. Subsequently, Merrill Lynch took up an equity commitment as a principal investor. Collectively, as part of the agreement, as amended, the sponsors will invest approximately $7.75 billion in equity (possibly lower due to cash accumulation at BCE) to fund this privatization, with the remainder in debt.

Note:
All figures are in Canadian dollars unless otherwise noted.

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