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Note 20 Long-term debt

Note 20 Long-term debt

 

FOR THE YEAR ENDED DECEMBER 31

NOTE   WEIGHTED AVERAGE
INTEREST RATE
  MATURITY   2016   2015  

Debentures

                   

1997 trust indenture

    4.06 % 2017 – 2045   13,600   13,400  

1976 trust indenture

    9.54 % 2021 – 2054   1,100   1,100  

Subordinated debentures

    8.21 % 2026 – 2031   275   275  

Finance leases

    6.63 % 2017 – 2047   2,260   2,260  

Unsecured committed term credit facility(1)

    1.49 % 2017   479   526  

Other

            188   141  

Total debt

            17,902   17,702  

Net unamortized premium

            18   24  

Unamortized debt issuance costs

            (41 ) (38 )

Less:

                   

Amount due within one year

19           (1,307 ) (2,298 )

Total long-term debt

            16,572   15,390  

 

Bell Canada’s debentures and subordinated debentures have been issued in Canadian dollars and the majority bear a fixed rate of interest.

Interest payments on debt for a principal amount of $700 million were swapped from fixed to floating. The debt and swap were settled in 2016. See Note 24, Financial and capital management for additional details.

 

Restrictions

Some of our debt agreements:

  • require us to meet specific financial ratios
  • impose covenants, maintenance tests and new issue tests
  • require us to make an offer to repurchase certain series of debentures upon the occurrence of a change of control event as defined in the relevant debt agreements

We are in compliance with all conditions and restrictions under such debt agreements.

 

All outstanding debentures are issued under trust indentures and are unsecured. All debentures are issued in series and certain series are redeemable at Bell Canada’s option prior to maturity at the prices, times and conditions specified for each series.

2016

On September 16, 2016, Bell Canada redeemed, prior to maturity, its 5.00% Series M-18 medium-term notes (MTN) debentures, having an outstanding principal amount of $700 million which were due on February 15, 2017. The interest rate swap which was used to hedge the interest rate exposure was also settled in 2016. See Note 24, Financial and capital management for additional details.

On August 12, 2016, Bell Canada issued 2.00% Series M-42 MTN debentures under its 1997 trust indenture, with a principal amount of $850 million, which mature on October 1, 2021. In addition, on the same date, Bell Canada issued 2.90% Series M-43 MTN debentures under its 1997 trust indenture, with a principal amount of $650 million, which mature on August 12, 2026.

On March 31, 2016, Bell Canada redeemed, prior to maturity, its 5.41% Series M-32 debentures, having an outstanding principal amount of $500 million which were due on September 26, 2016. We incurred an $11 million charge for the early debt redemption costs which was recorded in Other income (expense) in Q1 2016 in the income statement.

On February 29, 2016, Bell Canada issued 3.55% Series M-41 MTN debentures under its 1997 trust indenture, with a principal amount of $750 million, which mature on March 2, 2026.

On January 11, 2016, Bell Canada redeemed, prior to maturity, its 4.64% Series M-19 MTN debentures, having an outstanding principal amount of $200 million which were due on February 22, 2016, as well as its 3.65% Series M-23 MTN debentures, having an outstanding principal amount of $500 million which were due on May 19, 2016.

Subsequent to year end, on February 27, 2017, Bell Canada issued 2.70% Series M-44 MTN debentures under its 1997 trust indenture, with a principal amount of $1 billion, which mature on February 27, 2024. In addition, on the same date, Bell Canada issued 4.45% Series M-45 MTN debentures under its 1997 trust indenture, with a principal amount of $500 million, which mature on February 27, 2047.

2015

In 2015, Bell Canada repaid approximately $500 million ($395 million U.S. dollars) of the borrowings under its unsecured committed term credit facility that was used to fund part of the acquisition of Astral Media Inc.

On November 2, 2015, Bell Canada redeemed, prior to maturity, its 3.60% Series M-21 MTN debentures, issued under its 1997 trust indenture, having an outstanding principal amount of $1 billion which were due on December 2, 2015.

On October 1, 2015, Bell Canada issued 3.00% Series M-40 MTN debentures under its 1997 trust indenture, with a principal amount of $1 billion, which mature on October 3, 2022.

On March 30, 2015, Bell Canada issued 4.35% Series M-39 MTN debentures under its 1997 trust indenture, with a principal amount of $500 million, which mature on December 18, 2045.

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