Bell Canada Plans $1.45 Billion Notes Offering in the US
Bell Canada, the largest communications company in Canada, has announced plans to raise $1.45 billion through a notes offering in the United States. The offering will be divided into two series of notes, with the first series totaling $700 million and maturing on February 15, 2034. The second series will be worth $750 million and is set to mature on February 15, 2054.
The Series US-9 Notes will be issued at a price of $99.823 per $100 principal amount, yielding a maturity of 5.223%. On the other hand, the Series US-10 Notes will be issued at $99.869 per $100 principal amount, with a yield to maturity of 5.559%. The public offering is being managed by a syndicate of underwriters and is expected to close on February 15, 2024.
Bell Canada plans to use the net proceeds from the offering to repay its $600 million Series US-3 Notes due in March 2024. The company also intends to allocate funds for the payment of 3800 MHz spectrum licenses obtained by Bell Mobility Inc. in the Canadian government’s spectrum auction, as well as for other general corporate purposes, including the repayment of short-term debt. Both series of notes will be fully guaranteed by BCE Inc., Bell Canada’s parent company.
The move into the US debt market by Bell Canada has attracted attention from investors, who are closely monitoring the financial strength and market performance of BCE Inc. BCE’s commitment to returning value to its shareholders is evident through its consistent dividend payments. The company has increased its dividend for 15 consecutive years and has maintained dividend payments for an impressive 54 consecutive years. This reflects a stable cash flow and a shareholder-friendly policy. Furthermore, BCE boasts a significant dividend yield of 7.81% as of the last twelve months leading up to Q1 2023.
Despite downward revisions in earnings forecasts by four analysts, BCE’s stock has a reputation for trading with low price volatility, making it an attractive option for investors seeking stability. The company’s strong position in the Diversified Telecommunication Services industry also highlights its market relevance and potential resilience.
From a financial perspective, BCE has a market capitalization of $34.67 billion and an adjusted price-to-earnings (P/E) ratio of 20.25, based on the last twelve months as of Q1 2023. This valuation metric is important for investors to assess the company’s profitability relative to its current share price. Additionally, BCE’s revenue has grown by 2.06% over the same period, indicating a steady upward trend in its financial performance.
Founded in Montréal in 1880, Bell Canada offers a comprehensive range of communications services across Canada, including advanced broadband wireless, TV, Internet, media, and business communication services. The company’s investment initiative, Bell for Better, is dedicated to supporting the social and economic prosperity of communities and includes the Bell Let’s Talk initiative for Canadian mental health.
Analyst comment
Positive news: Bell Canada plans to raise $1.45 billion through a notes offering in the US. The offering will be used to repay debt, obtain spectrum licenses, and for general corporate purposes. BCE’s strong financial position and consistent dividend payments make it an attractive option for investors seeking stability. BCE’s market relevance and potential resilience in the telecom industry further support its market performance. BCE’s valuation and revenue growth indicate a steady upward trend in its financial performance. Overall, the market is expected to respond positively to this news.
