Telus 2010 Annual Report Download - page 160

156 . TELUS 2010 annual report
(a) Details of long-term debt
As at December 31 ($ in millions) 2010 2009
Series Rate of interest Maturity
TELUS Corporation Notes
U.S.(2) 8.00%(1) June 2011 $ 736 $ß1,411
CB 5.00%(1) June 2013 299 299
CC 4.50%(1) March 2012 300 299
CD 4.95%(1) March 2017 691 690
CE 5.95%(1) April 2015 498 498
CF 4.95%(1) May 2014 698 697
CG 5.05%(1) December 2019 990 989
CH 5.05%(1) July 2020 992 –
5,204 4,883
TELUS Corporation Commercial Paper 1.13% Through February 2011 104 467
TELUS Communications Inc. Debentures
1 12.00%(1) May 2010 –50
2 11.90%(1) November 2015 124 124
3 10.65%(1) June 2021 174 173
5 9.65%(1) April 2022 245 245
B 8.80%(1) September 2025 198 198
741 790
TELUS Communications Inc. First Mortgage Bonds
U 11.50%(1) July 2010 – 30
Capital leases issued at varying rates of interest from
2.04% to 5.30% and maturing on various dates up to 2013 7 2
Long-Term Debt 6,056 6,172
Less: Current maturities 743 82
Long-Term Debt – non-current $ß5,313 $ß6,090
(1) Interest is payable semi-annually.
(2) Principal face value of notes is U.S.$741 million (2009 – U.S.$1,348 million).
18 LONG-TERM DEBT
Summary schedule of long-term debt and related disclosures
On December 1, 2009, the Company exercised its right to early and
partially redeem, on December 31, 2009, U.S.$577 million of its publicly
held 2011 (U.S. Dollar) Notes. As set out in Note 8, the loss on redemption,
which included the loss arising on early settlement of the associated
cross currency interest rate swap agreements, was $99 million.
2011 Cross Currency Interest Rate Swap Agreements: With respect
to the 2011 (U.S. Dollar) Notes, U.S.$0.7 billion (2009 – U.S.$1.3 billion)
in aggregate, the Company entered into cross currency interest rate swap
agreements which effectively convert the principal repayments and
interest obligations to Canadian dollar obligations with an effective fixed
interest rate of 8.493% and an effective fixed economic exchange rate
of $1.5327.
The counterparties of the swap agreements are highly rated financial
institutions and the Company does not anticipate any non-performance.
TELUS has not required collateral or other security from the counter-
parties due to its assessment of their creditworthiness.
(b) TELUS Corporation notes
The notes are senior, unsecured and unsubordinated obligations of the
Company and rank equally in right of payment with all existing and future
unsecured, unsubordinated obligations of the Company, are senior in
right of payment to all existing and future subordinated indebtedness of
the Company, and are effectively subordinated to all existing and future
obligations of, or guaranteed by, the Company’s subsidiaries.
The indentures governing the notes contain certain covenants which,
among other things, place limitations on the ability of TELUS and certain
of its subsidiaries to: grant security in respect of indebtedness, enter
into sale and lease-back transactions and incur new indebtedness.
On July 27, 2010, the Company exercised its right to early and partially
redeem, on September 2, 2010, U.S.$607 million of its publicly held
2011 (U.S. Dollar) Notes. As set out in Note 8, the loss on the redemption,
which included the loss arising on early settlement of the associated
cross currency interest rate swap agreements, was $52 million.