Bell Aliant Inc. announces $200 million offering of cumulative 5-year rate reset preferred shares

  • Yield of 4.25 per cent for initial five and a half year period

THIS MEDIA RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

HALIFAX, Jan. 30, 2013 /CNW/ - Bell Aliant Inc. ("Bell Aliant") (TSX: BA) announced today that its subsidiary Bell Aliant Preferred Equity Inc. (the "Company") will be issuing 8,000,000 Cumulative 5-Year Rate Reset Preferred Shares, Series E (the "Series E Preferred Shares"), at a price of $25.00 per Series E Preferred Share, for aggregate gross proceeds of $200 million on a bought-deal basis to a syndicate of underwriters led by Scotiabank, TD Securities Inc., and CIBC.

The underwriters have been granted an over-allotment option to purchase an additional 1,200,000 Series E Preferred Shares at the offering price. Should the over-allotment option be fully exercised, the total gross proceeds of the Series E Preferred Share offering will be $230 million.

The Series E Preferred Shares will pay cumulative dividends of $1.0625 per share per annum, yielding 4.25 per cent, payable quarterly if, as and when declared by the Company's board of directors (with the first quarterly dividend to be paid on June 30, 2013), for the initial five and a half year period ending September 30, 2018. The dividend rate will be reset on September 30, 2018 and every five years thereafter at a rate equal to the five-year Government of Canada bond yield plus 2.64 per cent. The Series E Preferred Shares will be redeemable by the issuer on or after September 30, 2018, in accordance with their terms.

Holders of the Series E Preferred Shares will have the right, at their option, to convert their shares into Cumulative Floating Rate Preferred Shares, Series F, (the "Series F Preferred Shares") subject to certain conditions, on September 30, 2018 and on September 30 every five years thereafter. Holders of the Series F Preferred Shares will be entitled to receive cumulative quarterly floating dividends at a rate equal to the three-month Government of Canada Treasury Bill yield plus 2.64 per cent, if, as and when declared by the Company's board of directors.

The Series E Preferred Shares will be offered for sale to the public in each of the provinces and territories of Canada pursuant to a short form prospectus to be filed with Canadian securities regulatory authorities in all Canadian provinces and territories. The offering is scheduled to close on or about February 14, 2013, subject to certain conditions, including obtaining all necessary regulatory approvals.

The net proceeds of this offering will be used for repayment of short term debt and general corporate purposes.

The Series E Preferred Shares have not been, nor will be, registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States or to U.S. persons absent registration or applicable exemption from the registration requirement of such Act and applicable state securities laws. This news release shall not constitute an offer to sell, or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to qualification under the securities laws of any such jurisdiction.

Forward-looking statements
This news release contains forward-looking statements concerning the expected issuance and sale of Preferred Shares and the use of proceeds from the issuance. These statements are based on the current terms of the offering agreement and management's expectations at January 30, 2013, and are subject to change after that date. The statements are subject to important risks and uncertainties, including customary termination rights and closing conditions. Therefore, actual results and events may differ materially from these forward-looking statements, and there can be no assurance that the results or events predicted will be realized. Except as may be required by Canadian securities laws, Bell Aliant disclaims any intention and assumes no obligation to update or revise any forward-looking statement even if new information becomes available, as a result of future events or for any other reason.

About Bell Aliant
Bell Aliant Inc. (TSX: BA) is one of North America's largest regional communications providers and the first company in Canada to cover an entire city with fibre-to-the-home (FTTH) technology with its FibreOP™ services. Through its operating entities, Bell Aliant serves customers in six Canadian provinces with innovative information, communication and technology services, including voice, data, Internet, video and value-added business solutions. Bell Aliant's employees deliver the highest quality customer service, choice and convenience.  For more information, visit www.bellaliant.ca.

SOURCE: BELL ALIANT INC.

For further information:

Media Relations
Sarah Levy MacLeod
(855) 487-5026
sarah.levy@bellaliant.ca

Investor Relations
Zeda Redden
(877) 487-5726
zeda.redden@bellaliant.ca