Bell Canada solicits consents to amend five series of debentures

By Marisa Wong

Los Angeles, Oct. 7 – Bell Canada announced it has begun a solicitation of consents and proxies from holders of its C$400 million 10% debentures, series EH, due Nov. 15, 2041, C$125 million 9.7% debentures, series EJ, due Dec. 15, 2032, C$150 million 9.25% debentures, series EO, due May 15, 2053, C$150 million 10% debentures, series EU, due Dec. 1, 2054 and C$150 million 7% debentures, series EZ, due Sept. 24, 2027.

The purpose of the solicitation is to seek approval from the debentureholders, providing consents and voting as a single class, to an extraordinary resolution to approve some proposed amendments to the indenture dated July 1, 1976 governing the debentures.

The proposed amendments are designed to do the following:

• Align the 1976 indenture more closely with current and generally accepted market practice in Canada for investment-grade senior unsecured debt, including the deletion of some of the covenants of the indenture that require Bell to meet certain financial ratio tests when issuing long-term debt;

• Conform some terms of the 1976 indenture more closely to Bell’s more recent Canadian trust indenture dated Nov. 28, 1997 and U.S. trust indenture dated Sept. 12, 2016;

• Include a requirement for Bell to make an offer to repurchase the debentures at 101 in the event of some change-of-control events affecting Bell or BCE Inc. together with certain downgrades of credit ratings of the debentures to ratings below investment grade;

• Reduce administrative and governance processes; and

• Provide Bell with more flexibility with respect to raising capital to finance its business and operations, including maintaining Bell as the sole public debt issuer in BCE’s corporate structure.

The proposed amendments, if approved and implemented, will not modify the interest rate, interest payment schedule, principal amount or maturity date of any outstanding debentures nor the guarantee by BCE of Bell’s payment obligations under the debentures and the 1976 indenture.

To make these changes, Bell requires the written consent of holders of at least 66 2/3% of the total outstanding principal amount of all debentures outstanding as of the Sept. 15 record date.

Alternatively, if that consent threshold is not reached, Bell has called a special meeting of debentureholders to be held in a virtual-only live webcast format at 10 a.m. ET on Nov. 12.

For the proposed amendments to be approved at the meeting, Bell needs holders of more than 50% of the outstanding principal amount of debentures to be represented in person or by proxy and holders of not less than 66 2/3% of the principal amount of debentures represented to vote for the proposed amendments, subject to lower quorum requirements at an adjourned meeting.

If the required approval threshold for the consent solicitation is reached, the extraordinary resolution will be passed by written consent and the meeting will be cancelled.

The solicitation expires at 4 p.m. ET on Nov. 8.

If Bell receives the required consents, debentureholders who participate in the solicitation, voting for or against the proposal, will receive payment of a fee of C$0.50 for each C$1,000 principal amount of debentures held under the 1976 indenture. Debentureholders who do not respond to the solicitation will not receive payment of that fee.

BMO Nesbitt Burns Inc. (416 359-6359 or DCMCADSyndicateDesk@bmo.com) is acting as the solicitation agent.

D.F. King Canada (866 822-1244, 416 682-3825 or inquiries@dfking.com) is the information agent.

The communications company is based in Montreal.

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