Morningstar DBRS Assigns Credit Rating of BBB with Stable Trend to TELUS Corporation’s Debt Issuances

DBRS Ltd. (Morningstar DBRS) has assigned a credit rating of BBB, Stable trend to TELUS Corporation’s (TELUS or the Company; rated BBB with a Stable trend by Morningstar DBRS) CAD 500 million 5.10% Sustainability-Linked Notes, Series CAN due 2034, CAD 700 million 4.80% Notes, Series CAO due 2028, and CAD 600 million 4.95% Notes, Series CAP due 2031 (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 CAD 500 million 5.10% Sustainability-Linked Notes, Series CAN due 2034, are issued in accordance with TELUS’ Sustainability-Linked Bond Framework, adopted on June 14, 2021. The Notes are unsecured and unsubordinated obligations of the Company, rank pari passu in right of payment with all existing and future unsecured and unsubordinated obligations of the Company and are senior in right of payment to all existing and future subordinated indebtedness of the Company, but are effectively subordinated to all existing and future obligations of, or guaranteed by, the Company’s subsidiaries.

Morningstar DBRS expects TELUS to use the total net proceeds of the Notes offering for the repayment of outstanding indebtedness, including the repayment upon maturity of the 3.35% Series CK Notes due April 2024, as well as the repayment of commercial paper (incurred for general working capital purposes) and/or the potential repayment of the 2022 Credit Facility, and for other general corporate purposes.

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 TELUS Corporation, the relative weighting of the BRA factors was approximately equal.

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

(C) Weighting of the BRA and the FRA
In the analysis of TELUS Corporation, 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

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 28, 2023), https://dbrs.morningstar.com/research/410196

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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