Telus 2013 Annual Report Download - page 27

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27
Institution
Rating
S&P
A Standard & Poor's issue credit rating is a forward-looking opinion about
the creditworthiness of an obligor with respect to a specific financial
obligation, a specific class of financial obligations, or a specific financial
program (including ratings on medium-term note programs and commercial
paper programs).
An obligation rated ‘BBB’ exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation.
The ratings from ‘AA’ to ‘CCC’ may be modified by the addition of a plus or
minus sign to show relative standing within the major rating categories.
Moody’s
Long-term ratings are assigned to issuers or obligations with an original
maturity of one year or more and reflect both on the likelihood of a default
on contractually promised payments and the expected financial loss
suffered in the event of default.
Obligations rated Baa are judged to be medium-grade and subject to
moderate credit risk and as such may possess certain speculative
characteristics.
Moody's appends numerical modifiers 1, 2, and 3 to each generic rating
classification from ‘Aa’ through ‘Caa’. The modifier 1 indicates that the
obligation ranks in the higher end of its generic rating category; the modifier
2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in
the lower end of that generic rating category.
Fitch
'BBB' ratings indicate that expectations of default risk are currently low. The
capacity for payment of financial commitments is considered adequate but
adverse business or economic conditions are more likely to impair this
capacity. The modifiers "+" or "-" may be appended to a rating to denote
relative status within major rating categories. Such suffixes are not added to
the 'AAA' Long-Term rating.
As is common practice, during the last two years, each of the above-noted credit rating
agencies charged TELUS for their rating services which include annual surveillance fees
covering our outstanding long-term and short-term debt securities, in addition to one-
time rating fees for certain agencies when debt is initially issued. We reasonably expect
that such payments will continue to be made for rating services in the future.