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Bell announces public offering to fund Q9 Networks buy: Reuters

Bell Canada, Canada’s largest telecommunications company, announced on Tuesday a public offering of $1.5 billion of medium term notes (MTN) debentures in two series.

The net proceeds of the offering are to be used to fund parent company BCE Inc‘s (BCE.TO) acquisition of data centre operator Q9 Networks Inc and for general corporate purposes.

The telecom company will use the money to finance its latest spending to shore up its internet business, whether acquiring data centres or laying fiber-optic cables. It compares to ultra-low returns at the bank, and dismal or risky stock returns.

The $850 million 2 percent MTN debentures will mature on October 1, 2021, and will be issued at a price of $99.804 per $100 principal amount.

The $650 million 2.9 percent MTN debentures, will mature on August 12, 2026, and will be issued at a price of $99.733 per $100 principal amount.

“With this transaction, we are pleased to have secured significant debt capital at what is the all-time lowest financing rate ever achieved by Bell Canada on any MTN debenture issuance,” said Glen LeBlanc, Chief Financial Officer for Bell Canada and BCE Inc, said in a statement.

Update: BCE said earlier this week it will acquire equity it does not already own in Q9 Networks for $675 million. The sellers in the deal are Ontario Teachers’ Pension Plan, Providence Equity Partners and Madison Dearborn Partners.

(Reporting by Anya George Tharakan in Bengaluru; Editing by Sunil Nair)

(This story has been edited by Kirk Falconer, editor of PE Hub Canada)

Photo courtesy of Reuters/Shaun Best