DBRS Assigns Pfd-3 Rating to Bell Aliant Preferred Equity’s $200 Million Preferred Shares Issuance

DBRS has today assigned a rating of Pfd-3 with a Stable trend to Bell Aliant Preferred Equity Inc.’s Series E preferred share issuance totalling $200 million (the Series E Preferred Shares) with a $30 million over-allotment option. The Series E Preferred Shares are cumulative five-year rate reset preferred shares with an initial dividend rate of 4.25%.

This share issuance was initiated by Bell Aliant Preferred Equity Inc. today by way of Short Form Prospectus for settlement on or around February 14, 2013.

Each Series E Preferred Share will be fully and unconditionally guaranteed by Bell Aliant Regional Communications Inc. (Bell Aliant GP) as to (1) the payment of dividends, if, as and when declared; (2) the payment of amounts due on redemption of the Preferred Shares; and (3) the payment of the amounts due on the liquidation, dissolution or winding-up of the Corporation. Bell Aliant GP is the general partner and guarantor of Bell Aliant Regional Communications, Limited Partnership (Bell Aliant LP; rated BBB/R-2 (middle) by DBRS) and its debt obligations.

The Series E Preferred Share Guarantee will rank on a pari passu basis with the obligations of Bell Aliant GP under the Series F Guarantee in respect of the Series F Shares, and under similar guarantees that may be provided by Bell Aliant GP in respect of other series of preference shares of the Corporation (including similar guarantees provided in respect of the Series A Shares, the Series B Shares, the Series C Shares and the Series D Shares).

DBRS expects Bell Aliant Preferred Equity Inc. to indirectly lend the proceeds to Bell Aliant LP, whereby Bell Aliant LP intends to repay short-term debt and use the remaining proceeds for general corporate purposes.

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

The applicable methodology is Rating the Communications Industry (April 2011), which can be found on our website under Methodologies.