#Canada #Vancouver #Investment #Junior Subordinated Notes #TELUS

TELUS Launches $1.6 Billion Junior Subordinated Note Offering

On April 15, 2025, TELUS Corporation, a prominent telecommunications and technology entity based in Vancouver, British Columbia, revealed the pricing of its inaugural offering of junior subordinated notes amounting to $1.6 billion. This issuance encompasses two distinct series, both of which feature an extended maturity of 30.25 years, reflecting a strategic approach towards capital management and debt financing in a dynamic economic environment.

The first series, identified as Series CAR, consists of fixed-to-fixed rate junior subordinated notes with an interest rate pegged at 6.25%. These notes are priced at approximately $99.965 for every $100 principal amount, providing an effective yield of 6.25% annually until July 21, 2030. After this initial period, the interest rate is set to reset every five years based on the prevailing five-year Government of Canada rate plus a spread of 3.482%. However, a floor rate ensures that the interest rate does not dip below the initial 6.25% during any five-year period.

In contrast, the second series, known as Series CAS, carries a slightly higher fixed rate of 6.75%, priced at $99.959 per $100 principal amount, yielding an effective annual interest of 6.75% until July 21, 2035. Similarly to Series CAR, the interest rate is subject to reset every five years thereafter to the five-year Government of Canada rate plus a margin of 3.609%, but with a minimum rate assurance of 6.75%. The anticipated closing date for this offering is projected for around April 21, 2025.

The net proceeds from this substantial offering are earmarked for multiple strategic initiatives. Primarily, TELUS intends to utilize these funds towards the repayment of existing debts, which include commercial paper and credit facility amounts that have been raised for working capital purposes. Additionally, the capital will also serve general corporate ends, reinforcing TELUS's commitment to maintaining a robust financial standing while expanding its operational capabilities.

It's noteworthy that TELUS has received a rating from credit agencies indicating that these junior subordinated notes will receive a 50% equity credit. This factor contributes positively to TELUS’s overall financial structuring and positions the company favorably within the market.

This announcement underscores TELUS's proactive approach to optimizing its capital structure amid fluctuating market conditions. As one of the leading telecommunications players in Canada, TELUS has consistently focused on leveraging technology to achieve remarkable outcomes for customers and communities alike.

The company, generating over $20 billion in annual revenue through its extensive suite of broadband services, has established itself as a cornerstone in the telecom industry, impacting the lives of over 20 million customers. TELUS is not just about telecommunications; it is invested in enhancing quality of life through innovations in health, agriculture, and various other sectors.

The proposed offering is part of a broader strategy as TELUS seeks to maintain its leadership in client service excellence and social capitalism. TELUS believes in giving back to the community, and this is reflected in their philosophy of 'give where we live', which has seen the company and its members contribute significantly to various social causes over the years.

For potential investors or stakeholders, the offering is structured under a prospectus supplement to the short form base shelf prospectus dated August 2, 2024. Access to the detailed prospectus and related information is made available in compliance with the regulatory guidelines set forth by Canadian securities authorities. Both electronic and paper copies of the offering documents can be obtained upon request.

As TELUS moves forward with its plans, it emphasizes transparency and encourages all interested parties to review the offering documents before making investment decisions. The company remains optimistic about future growth opportunities and is committed to enhancing value for its shareholders and stakeholders alike, solidifying its position in an increasingly competitive landscape.