MONTREAL – Bell Canada announced the public offering of $1 billion worth of medium term debentures to pre-fund its debt repayments.
The debentures, which will be dated June 29, 2009 and mature on June 30, 2014, will be issued for $99.842 for a yield to the investor of 4.886% compounded semi-annually. Bell Canada parent BCE Inc. will “fully and unconditionally” guarantee the debentures, the press release read.
A prospectus supplement to the short form base shelf prospectus dated June 13, 2007, will be filed with the various securities regulatory authorities in all of the provinces of Canada.
Moody’s Investors Service gave the senior unsecured notes a Baa1 rating, the same rating as the company’s existing senior unsecured debt obligations.
"We expect that Bell Canada will use the proceeds of the new debt issue to pre-fund 2009 and 2010 debt maturities and that any surplus will be used for purposes that either reduce non-debt liabilities or enhance the company’s cash flow generating capacity" said Moody’s vice president and senior credit officer Bill Wolfe, in a statement.
Calling the transaction “opportunistic”, Wolfe also noted that Bell did not need to raise funds in order to repay near term debt maturities.
