Telus 2013 Annual Report Download - page 25

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been issued and registered in uncertificated form that are evidenced by an advice or
other statement and which are maintained electronically with our transfer agent, but for
which no certificate has been issued (book entry form).
RATINGS
The following information relating to our credit ratings is provided as it relates to our
financing costs, liquidity and operations. Additional information relating to credit ratings is
contained in MD&A Section 7.5- Liquidity and capital resource measures to Section 7.7
– Sale of trade receivables, which are hereby incorporated by reference.
Credit ratings are important to our borrowing costs and ability to obtain short-term and
long-term financing and the cost of such financing. A reduction in the current rating on
our debt by rating agencies, particularly a downgrade below investment grade ratings or
a negative change in its ratings outlook could adversely affect our cost of financing and
our access to sources of liquidity and capital. We believe our adherence to our stated
financial policies and the resulting investment grade credit ratings, coupled with our
efforts to maintain constructive relationships with banks, investors and credit rating
agencies, continue to provide TELUS with reasonable access to capital markets.
In addition, credit ratings may be important to customers or counterparties when we
compete in certain markets and when we seek to engage in certain transactions
including transactions involving over-the-counter derivatives. As at December 31, 2013,
TCI continues to be a party to an agreement expiring in August 2014 with an arm’s-
length securitization trust associated with a major Schedule I bank, under which TCI is
able to sell an interest in certain of its trade receivables up to a maximum of $500
million. TCI is required to maintain at least a BBB (low) credit rating by DBRS Ltd. or the
securitization trust may require the sale program to be wound down. On March 1, 2014
TCI entered into a new agreement expiring December 31, 2016 with the same arm’s
length securitization trust. Material terms and conditions in the new facility are
substantially unchanged other than the requirement to maintain at least a BBB (low)
credit rating. This requirement has been reduced to BB.
The rating agencies regularly evaluate TELUS and/or TCI, and their ratings of our long-
term and short-term debt are based on a number of factors, including our financial
strength as well as factors not entirely within our control, including conditions affecting
the telecommunications industry generally, and the wider state of the economy.
The Company’s credit ratings are outlined in the chart below. Credit ratings are not
recommendations to purchase, hold or sell securities and do not address the market
price or suitability of a specific security for a particular investor. In addition, real or
anticipated changes in the rating assigned to a security will generally affect the market
value of that security. There can be no assurance that a rating will remain in effect for
any given period of time or that a rating will not be revised or withdrawn entirely by a
rating agency in the future.