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6.6 Credit ratings

6.6 Credit ratings

Credit ratings generally address the ability of a company to repay principal and pay interest on debt or dividends on issued and outstanding preferred shares.

Our ability to raise financing depends on our ability to access the public equity and debt capital markets as well as the bank credit market. Our ability to access such markets and the cost and amount of funding available partly depends on the quality of our credit ratings at the time capital is raised. Investment-grade credit ratings usually mean that when we borrow money, we qualify for lower interest rates than companies that have ratings lower than investment-grade. A ratings downgrade could result in adverse consequences for our funding capacity or ability to access the capital markets.

The following table provides BCE’s and Bell Canada’s credit ratings, which are considered investment grade, as at March 2, 2017 from DBRS, Moody’s and S&P.

 

Key credit ratings

 

 

BELL CANADA(1)

MARCH 2, 2017

DBRS   MOODY'S   S&P  

Commercial paper

R-2 (high)   P-2   A-1 (Low) (Canadian scale)  

 

        A-2 (Global scale)  

Long-term debt

BBB (high)   Baa1   BBB+  

Subordinated long-term debt

BBB (low)   Baa2   BBB  
             

 

BCE(1)

 

DBRS   MOODY'S   S&P  

Preferred shares

Pfd-3     P-2(Low) (Canadian scale)  

 

        BBB-(Global scale)  

 

Following the announcement of the proposed acquisition of Q9, on August 8, 2016, DBRS downgraded Bell Canada’s debentures and MTN debentures rating to BBB (high) from A (low), subordinated debentures rating to BBB (low) from BBB and commercial paper rating to R-2 (high) from R-1 (low). DBRS also downgraded BCE Inc.’s preferred shares rating to Pfd-3 from Pfd-3 (high).

As of March 2, 2017, BCE and Bell Canada’s credit ratings have stable outlooks from DBRS, Moody’s and S&P.

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