Telebec, NorthernTel seek consents to amend C$137.7 million debentures

By Devika Patel

Knoxville, Tenn., Sept. 30 - Telebec LP and NorthernTel LP said they are seeking consents from holders to amend the trust indentures for Telebec's C$100 million in debentures and NorthernTel's C$37.7 million in debentures. These amendments are required to facilitate a transfer of the companies' assets to Bell Aliant Regional Communications, LP.

Bell Aliant and some of its subsidiaries are planning to convert Bell Aliant's income trust structure into a corporate structure. Telebec and NorthernTel are owned by Bell Aliant, and the transfer of assets is intended to simplify the group's organizational structure by combining the companies' businesses.

Under the proposed transaction, there will be no change to the interest rate, interest payment schedule or maturity date of any outstanding debentures.

The companies believe the amendments and the asset transfer will benefit the investors. The amendments will result in the debentures having principal covenants that are, as much as possible, equivalent to those of Bell Aliant's medium-term notes.

The debentures will also become guaranteed by the Bell Aliant group, and the companies said investors will have access to an increased flow of information relating to the debt because Bell Aliant is a much larger entity with greater financial resources than either Telebec or NorthernTel. The debentures will also carry the same credit ratings as they currently have, which is the same as Bell Aliant's medium-term notes.

The companies also said that it is possible that the debentures may have enhanced liquidity and value through this amendment, since they will become more tradeable.

To effect these changes, the companies need consents from holders of at least two-thirds of the Telebec debentures and three-quarters of the NorthernTel debentures.

National Bank Financial Inc. will assist and advise the companies in seeking the consents.

Bell Aliant is a communications company with a decentralized upper management located in Atlantic Canada. Telebec is a telecommunications provider in rural Quebec. NorthernTel is a telecommunications provider in rural northeastern Ontario.

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