PrefBlog

S&P has announced:

it lowered its long-term corporate credit ratings on Montreal, Que.-based holding company BCE Inc. and wholly owned subsidiary Bell Canada to ‘BB-‘ from ‘A-‘. The ratings on both companies remain on CreditWatch with negative implications where they were placed April 17, 2007.
…
The ratings on BCE’s C$2.77 billion preferred shares are also unchanged because we expect these to be redeemed as well. Once the tender is completed, we will withdraw these ratings. However, the ratings on these securities could
be lowered if they are not redeemed as planned.
…
In addition, we lowered the ratings on about C$4.9 billion of Bell Canada senior unsecured debentures outstanding (which we do not expect will be redeemed) to ‘BB+’ from ‘A-‘, reflecting what we think is the best possible outcome based on publicly available information on the LBO.
…
The multinotch downgrade reflects our view that BCE no longer possesses an investment-grade financial policy given the high degree of certainty that the LBO will be finalized shortly. On a pro forma basis, the company will have a highly leveraged capital structure, weakened credit measures, and significantly reduced cash flow-generating capability owing to its LBO and associated heavy interest burden.

S&P has had BCE on Credit Watch negative for quite some time. The BCE/Teachers deal was last reviewed here on August 10.

This entry was posted on Monday, September 24th, 2007 at 4:41 pm and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.