Morningstar DBRS Assigns Credit Rating of BBB (high) with Stable Trend to Bell Canada’s Debt Issuances

DBRS Ltd. (Morningstar DBRS) has assigned a credit rating of BBB (high), Stable trend to Bell Canada’s (Bell Canada or the Company; rated BBB (high) with a Stable trend by Morningstar DBRS) USD 700 million 5.200% Series US-9 Notes due 2034 and USD 750 million 5.550% Series US-10 Notes due 2054 (the Notes).

The credit ratings being assigned are based upon the credit rating on an already-outstanding series of the above-mentioned debt instrument.

The Notes are unsecured and unsubordinated obligations of Bell Canada and rank pari passu with all other existing and future unsecured and unsubordinated indebtedness of the Company. The Notes are fully and unconditionally guaranteed by BCE Inc. (rated BBB with a Stable trend by Morningstar DBRS).

Morningstar DBRS expects Bell Canada to use the net proceeds from the issuance for the repayment at maturity of Bell Canada’s USD 600 million Series US-3 Notes due March 2024, to fund the remaining payment of the 3800 MHz spectrum licences secured by Bell Mobility Inc. through the Canadian government’s 3800 MHz spectrum auction and for other general corporate purposes, which may include the repayment of short-term debt.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance factor(s) that had a significant or relevant effect on the credit analysis.

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (January 23, 2024), https://dbrs.morningstar.com/research/427030.

BUSINESS RISK ASSESSMENT (BRA) AND FINANCIAL RISK ASSESSMENT (FRA)

(A) Weighting of BRA Factors
In the analysis of Bell Canada, the relative weighting of the BRA factors was approximately equal.

(B) Weighting of FRA Factors
In the analysis of Bell Canada, the relative weighting of the FRA factors was approximately equal.

(C) Weighting of the BRA and the FRA
In the analysis of Bell Canada, the BRA carries more weight than the FRA.

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

Morningstar DBRS applied the following principal methodology:
-- Global Methodology for Rating Companies in the Communications Industry (July 20, 2023), https://dbrs.morningstar.com/research/417420
-- Global Methodology for Rating Companies in the Broadcasting Industry (March 14, 2023), https://dbrs.morningstar.com/research/410794

The following methodologies and criteria have also been applied:
-- DBRS Morningstar Global Criteria: Guarantees and Other Forms of Support (March 28, 2023), https://dbrs.morningstar.com/research/411694
-- DBRS Morningstar Global Criteria: Commercial Paper Liquidity Support for Non-Bank Issuers (February 24, 2023), https://dbrs.morningstar.com/research/410196
-- DBRS Morningstar Global Criteria: Rating Corporate Holding Companies and Parent/Subsidiary Rating Relationships (September 27, 2023), https://dbrs.morningstar.com/research/421119
-- DBRS Morningstar Global Criteria: Preferred Share and Hybrid Security Criteria for Corporate Issuers (October 19, 2023), https://dbrs.morningstar.com/research/422134

The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.

A description of how Morningstar DBRS analyzes corporate finance transactions and how the methodologies are collectively applied can be found at: https://dbrs.morningstar.com/research/397223.

The credit rating was initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for this credit rating action.

Morningstar DBRS had access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with this credit rating action.

This is a solicited credit rating.

The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. Morningstar DBRS trends and credit ratings are under regular surveillance.

Information regarding Morningstar DBRS credit ratings, including definitions, policies, and methodologies, is available on dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.

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