Morningstar DBRS Assigns Provisional Credit Rating of (P) BB (high) With a Stable Trend to TELUS Corporation's Subordinated Notes Issuance

DBRS Limited (Morningstar DBRS) assigned a provisional credit rating of (P) BB (high), with a Stable trend, to TELUS Corporation's (TELUS or the Company) fixed-to-fixed rate subordinated notes issuance Series CAR and Series CAS due 2055 (the Notes). There is no change to either the Company's Issuer Rating or senior unsecured debt rating, which are rated BBB with Stable trends.

The Notes are unsecured subordinated obligations of the Company, are subordinated in right of payment to all existing and future senior indebtedness and are effectively subordinated to all indebtedness and obligations of, or guaranteed by, the Company's subsidiaries.

Morningstar DBRS expects the net proceeds of the Notes issuance will be used for the repayment of outstanding indebtedness, the reduction of cash amounts outstanding under the Receivables Trust, the repayment of commercial paper (incurred for general working capital purposes), and for other general corporate purposes.

The credit rating on the Notes is provisional, based on information provided to Morningstar DBRS by the Company and its agents as at the date of this press release. The credit rating can be finalized upon receipt of the final information, data, and governing transaction documents. To the extent that the documents and the information provided to Morningstar DBRS as of this date differ from the final version of the governing transaction documents, Morningstar DBRS may assign a different final credit rating to the Notes.

TELUS' credit ratings reflect its position as a national wireline and wireless network provider, its diverse and national customer base, high quality network and diverse operating platform that includes TELUS Digital, TELUS Health, and TELUS Agriculture and Consumer Goods. The credit ratings also acknowledge the intensely competitive Canadian telecommunications landscape, the secular decline in legacy services, the high capital intensity of the industry and the risks associated with regulatory changes.

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 Factors in Credit Ratings (August 13, 2024) https://dbrs.morningstar.com/research/437781

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 greater 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 Services Industries (February 03, 2025)
https://dbrs.morningstar.com/research/447184

Morningstar DBRS credit ratings may use one or more sections of the Morningstar DBRS Global Corporate Criteria (February 3, 2025; https://dbrs.morningstar.com/research/447186), which covers, for example, topics such as holding companies and parent/subsidiary relationships, guarantees, recovery, and common adjustments to financial ratios.

The following methodologies have also been applied:

Morningstar DBRS Criteria: Approach to ESG Factors in Credit Ratings (August 13, 2024)
https://dbrs.morningstar.com/research/437781

Morningstar DBRS Global Corporate Criteria (February 03, 2025)
https://dbrs.morningstar.com/research/447186

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/431153.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at info-DBRS@morningstar.com.

A provisional credit rating is not a final credit rating with respect to the above-mentioned debt and may change or be different than the final credit rating assigned or may be discontinued. The assignment of a final credit rating on the above-mentioned debt is subject to receipt by Morningstar DBRS of all data and/or information and final documentation that Morningstar DBRS deems necessary to finalize the credit rating.

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.

For more information on Morningstar DBRS' policy regarding the solicitation status of credit ratings, please refer to our Credit Ratings Global Policy, which can be found in the Morningstar DBRS Understanding Ratings section of our website.

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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