US$ 8% Notes due June 1, 2011 to be partially redeemed
VANCOUVER, Dec. 1 /CNW/ - TELUS Corporation (TSX: T, T.A; NYSE: TU) announced today the pricing of its offering of C$1 billion senior unsecured notes and the redemption on December 31, 2009 of US$583.5 million principal amount of its US$ 8% notes due June 1, 2011 (CUSIP No. 87971MAC7).
The 5.05% 10-year notes, Series CG ("the Notes") were priced at $99.419 per $100 principal amount for an effective yield of 5.125% per annum and will mature on December 4, 2019. The Notes are offered through a syndicate of agents led by Scotia Capital and CIBC World Markets. Closing of the offering is expected to occur on or about December 4, 2009.
The net proceeds of the sale of the Notes offered will be used to fund the partial redemption on December 31, 2009 of US$583.5 million principal amount of TELUS Corporation's outstanding US$1.945 billion 8% notes due June 1, 2011, for payments required to terminate cross-currency interest rate swaps associated with the notes to be redeemed and any excess for general corporate purposes, including increasing working capital (and, pending any such use, investing in bank deposits and short-term marketable securities). The estimated redemption price for the notes to be redeemed (net of the US$20 million principal amount of such notes owned indirectly by TELUS), excluding accrued interest, is approximately US$638 million and the estimated payment required to terminate the associated swaps is approximately C$309 million.
TELUS will be filing a prospectus supplement to its short form base shelf prospectus dated September 3, 2009 with securities regulatory authorities in Canada and the U.S. This news 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 or U.S. securities regulatory authority, nor has any authority passed upon the accuracy or adequacy of the short form base shelf prospectus or the prospectus supplement.
Copies of the short form base shelf prospectus and the prospectus supplement relating to the offering of the Notes to be filed with securities regulatory authorities may be obtained from Scotia Capital Inc. Debt Capital Markets, 40 King Street West, 68th Floor, Toronto, Ontario, M5W 2X6 c/o John Tkach, telephone 416-863-7776 or e-mail firstname.lastname@example.org.
TELUS has given notice today of a partial 30% redemption, on a pro rata basis, on December 31, 2009 of US$583.5 million principal amount of its outstanding US$1.945 billion 8% notes due June 1, 2011. The redemption price will be based on the yield for a U.S. Treasury security with the equivalent maturity plus 30 basis points, as provided in the trust indenture pursuant to which such notes were issued, but in no case will the redemption price be less than par. Note holders will also receive accrued interest to the December 31, 2009 redemption date.
Costs and non-cash write-downs related to the early redemption of the US$ 8% notes due June 1, 2011 are expected to result in increased financing charges which will have an after tax impact on the Corporation in the fourth quarter of 2009 of approximately 21 cents per share, which is not reflected in TELUS' November 6, 2009 guidance update. The US$ 8% notes were swapped at issuance into a Canadian dollar liability with an effective yield of 8.493%.
TELUS (TSX: T, T.A; NYSE: TU) is a leading national telecommunications company in Canada, with $9.6 billion of annual revenue and 11.9 million customer connections including 6.4 million wireless subscribers, 4.1 million wireline network access lines, and 1.2 million Internet subscribers. Led since 2000 by President and CEO, Darren Entwistle, TELUS provides a wide range of communications products and services including data, Internet protocol (IP), voice, entertainment and video. Nine TELUS Community Boards across Canada lead our local philanthropic initiatives.
Forward Looking Statements
This news release contains forward looking statements. Forward looking statements are not based on historical facts, but rather on current expectations, Company assumptions and projections about future events, including the cost of the 8% 2011 notes redemption and swap termination, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward looking statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Company assumptions and risk factors are listed from time to time in TELUS' reports, public disclosure documents including Management's discussion and analysis, Annual Information Form, and in other filings with securities regulatory authorities in Canada and the United States.
SOURCE TELUS Corporation
For further information: For further information: Robert Mitchell, TELUS Investor Relations, (416) 279-3219, email@example.com; Jim Johannsson, TELUS Media Relations, (780) 493-6197, firstname.lastname@example.org