TELUS ANNOUNCES THREE-TRANCHE NOTE OFFERING
- None.
- None.
Insights
The pricing of TELUS's $1.8 billion senior unsecured notes is a significant capital market transaction that warrants attention from investors due to its sheer size and potential impact on the company's capital structure. The introduction of three different maturities allows the company to spread out its debt obligations over time, which could be a strategic move to manage cash flows and hedge against interest rate risk. The rates offered, ranging from 4.80% to 5.10%, are indicative of the current borrowing costs and creditworthiness of the company.
From an investor's standpoint, the interest rates should be compared against the industry benchmarks and the prevailing economic conditions. If the rates are favorable compared to TELUS's peers, it might suggest a strong market position or a favorable view from investors regarding the company's future cash flows and credit risk. On the other hand, if the rates are higher, it could indicate a perceived higher risk associated with the company's debt. The involvement of leading financial institutions in the syndicate, such as CIBC World Markets, RBC Dominion Securities and Scotia Capital, provides additional credibility to the offering.
The telecom sector often requires substantial capital for infrastructure and technology investments, making debt offerings a common practice to secure necessary funding. TELUS's issuance of sustainability-linked notes is particularly noteworthy, as it reflects a growing trend in the corporate world to align financial strategies with environmental and social governance (ESG) criteria. This could potentially attract a different subset of investors who are looking to invest in instruments that are linked to sustainability performance targets.
It is crucial to analyze the demand for such sustainability-linked notes in the market and how they perform compared to traditional notes. This could offer insights into the evolving preferences of institutional investors and the possible premium they are willing to pay for sustainable investment opportunities. Additionally, the long-term implications of this move on TELUS's brand reputation and customer loyalty should not be underestimated, as consumers and investors increasingly favor companies with strong ESG commitments.
TELUS's decision to issue senior unsecured notes can be evaluated from a debt capital markets perspective. Unsecured notes imply that they are not backed by collateral, which often results in higher interest rates than secured debt due to the increased risk to lenders. However, they also offer more flexibility to the issuer, as there are typically fewer restrictions on how the funds can be used. The term 'senior' indicates that these notes will take precedence over other forms of debt in the event of a liquidation scenario, which is an important consideration for risk-averse investors.
Understanding the timing of this offering is crucial. It is often influenced by market conditions, such as interest rates and investor sentiment. The closing of this offering is expected to occur shortly after the announcement, which suggests that TELUS is capitalizing on what they perceive as favorable market conditions. Monitoring the subscription levels and the secondary market performance post-issuance will provide further insight into the market's reception of these notes and TELUS's credit standing.
The
The
The
The net proceeds of this offering will be used for the repayment of outstanding indebtedness, including all or a portion of the repayment upon maturity of TELUS'
The Series CAN notes are "Sustainability-Linked Bonds" issued pursuant to TELUS' Sustainability-Linked Bond Framework announced on June 14, 2021, as it may be amended, restated and/or replaced from time to time (the "Framework") and will be TELUS' sixth bond offering under the Framework. As part of the Framework, TELUS has committed to reducing its absolute Scope 1 and 2 greenhouse gas ("GHG") emissions by
The Series CAN Note offering supports TELUS' commitment to environmental sustainability by linking financing to the achievement of ambitious ESG targets. The target set out in the Framework was approved by the Science Based Targets initiative ("SBTi"), further demonstrating TELUS' global sustainability leadership and support of the world's fight against climate change. The Sustainability Performance Target is consistent with reductions required to limit warming to below 1.5°C, which at the time of publication of the Framework, was considered the most ambitious designation available through the SBTi process.
TELUS will report annually on its performance against the Sustainability Performance Target and will also obtain an annual independent and external verification of its performance against the Sustainability Performance Target in the form of a limited assurance report. TELUS' performance as well as the limited assurance report will be included in its annual Sustainability and ESG Report, or other similar report(s) as the case may be, and will be available on TELUS' website.
Sustainalytics, a leading independent ESG research, ratings and analytics firm, issued a Second Party Opinion in June 2021 (as subsequently extended) confirming that the Framework aligns with the International Capital Market Association's Sustainability-Linked Bond Principles, 2020.
This media release does not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. The securities being offered have not been approved or disapproved by any Canadian securities regulatory authority, nor has any authority passed upon the accuracy or adequacy of the short form base shelf prospectus or the prospectus supplement. The notes have not been registered under the
The notes of each series are being offered pursuant to a prospectus supplement to the short form base shelf prospectus of TELUS dated August 8, 2022. The short form base shelf prospectus and prospectus supplement contain important detailed information about each series of notes. Copies of the short form base shelf prospectus and the prospectus supplement relating to the offering of each series of notes when filed with securities regulatory authorities in
This news release contains statements about future events pertaining to the offering, including the anticipated closing date of the offering, the intended use of the net proceeds of the offering, the Framework, including TELUS' commitment to reduce its absolute Scope 1 and 2 GHG emissions by
TELUS (TSX: T, NYSE: TU) is a dynamic, world-leading communications technology company with more than
Operating in 32 countries around the world, TELUS International (TSX and NYSE: TIXT) is a leading digital customer experience innovator that designs, builds, and delivers next-generation solutions, including AI and content moderation, for global and disruptive brands across strategic industry verticals, including tech and games, communications and media, eCommerce and fintech, banking, financial services and insurance, healthcare, and others.
TELUS Health is a global healthcare leader, which provides employee and family primary and preventive healthcare and wellbeing solutions. Our TELUS team, along with our 100,000 health professionals, are leveraging the combination of TELUS' strong digital and data analytics capabilities with our unsurpassed client service to dramatically improve remedial, preventive and mental health outcomes covering nearly 70 million lives, and growing, around the world. As the largest provider of digital solutions and digital insights of its kind, TELUS Agriculture & Consumer Goods enables efficient and sustainable production from seed to store, helping improve the safety and quality of food and other goods in a way that is traceable to end consumers.
Driven by our determination and vision to connect all citizens for good, our deeply meaningful and enduring philosophy to give where we live has inspired TELUS and our team to contribute
For more information about TELUS, please visit telus.com, follow us at @TELUSNews on X and @Darren_Entwistle on Instagram
Investor Relations
Ian McMillan
(604) 317-8768
ir@telus.com
Media Relations
Steve Beisswanger
(514) 865-2787
Steve.Beisswanger@telus.com
View original content to download multimedia:https://www.prnewswire.com/news-releases/telus-announces-three-tranche-note-offering-302060199.html
SOURCE TELUS Corporation
FAQ
What is the total amount of senior unsecured notes priced by TELUS?
Who are the agents leading the offering of TELUS' senior unsecured notes?