DBRS Places Manitoba Telecom Services Inc. Under Review with Positive Implications

DBRS Limited (DBRS) has today placed all of the ratings of Manitoba Telecom Services Inc. (MTS or the Company) Under Review with Positive Implications following the Company’s announcement that it has entered into a definitive arrangement agreement with Bell Canada’s parent company, BCE Inc. (BCE), whereby BCE will purchase all of the issued and outstanding shares of MTS. The transaction is valued at approximately $3.9 billion, including BCE’s assumption of MTS’s net debt outstanding. The transaction is subject to the approval of MTS shareholders, as well as the customary regulatory (the Canadian Radio-television and Telecommunications Commission, the Competition Bureau, and Innovation, Science and Economic Development Canada, formerly Industry Canada) and court approvals. The transaction is expected to close in late 2016 or early 2017.

The Positive Implications of the Under Review status reflects BCE’s potential assumption of MTS’s outstanding debt should the transaction close according to terms substantially similar to those proposed. In such case, the credit risk on MTS’s debt will likely benefit from a higher-rated Bell Canada.

DBRS will proceed with its review as more information becomes available and aims to resolve the Under Review status by the time the transaction closes.

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

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

The applicable methodologies are Rating Company’s in the Communications Industry and DBRS Criteria: Commercial Paper Liquidity Support for Non-Bank Financial Issuers, which can be found on our website under Methodologies.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.