MONTREAL — BCE is making a public offering of $1.5 billion in medium term note (MTN) debentures to help finance its recently announced acquisition of Q9 Networks and for other corporate purposes.
BCE announced late Tuesday it will issue $850 million in 2.00% MTN debentures, to be dated August 12, 2016, and to mature on October 1, 2021, at a price of $99.804 per $100 principal amount. A second series of $650 million in 2.90% MTN debentures will be issued at a price of $99.733 per $100 principal amount, also dated August 12, 2016 but maturing on August 12, 2026.
“With this transaction, we are pleased to have secured significant debt capital at what is the all-time lowest financing rate ever achieved by Bell Canada on any MTN debenture issuance,” Glen LeBlanc, chief financial officer for BCE and Bell Canada, said in a news release.
“With these new issuances, Bell Canada’s annual pre-tax cost of outstanding public debentures has declined to 4.56% and average term to maturity is approximately 9.4 years, ensuring predictability in debt service costs and insulating against interest rate volatility,” LeBlanc said.
BCE said in its news release it intends to use the net proceeds of the offering to fund the redemption of Bell Canada’s $700 million principal amount of 5.00% debentures, due February 15, 2017, and to fund its acquisition of Q9 Networks Inc., a transaction valued at $675 million that BCE announced earlier this week.
The two new series of MTN debentures (Series M-42 and Series M-43) are being publicly offered in all Canadian provinces through a syndicate of agents, BCE said. Closing of the offering of the MTN debentures is expected to occur on August 12.
