Telus 2014 Annual Report Download - page 31

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The following descriptions of the rating categories prepared by the respective rating
agencies (obtained from their public websites) are provided solely to satisfy
requirements of Canadian law and do not constitute an endorsement by TELUS of the
categories or of the application of the respective rating agencies.
Institution Rating
DBRS The DBRS® long-term rating scale provides an opinion on the risk of
default. That is, the risk that an issuer will fail to satisfy its financial
obligations in accordance with the terms under which an obligation has been
issued. Ratings are based on quantitative and qualitative considerations
relevant to the issuer, and the relative ranking of claims. All rating
categories, other than AAA and D, also contain subcategories “(high)” and
“(low)”. The absence of either a “(high)” or “(low)”designation indicates the
rating is in the middle of the category. An “A” rating denotes good credit
quality. The capacity for the payment of financial obligations is substantial,
but of lesser credit quality than AA. May be vulnerable to future events, but
qualifying negative factors are considered manageable. Long-term debt
rated “BBB” is of adequate credit quality. The capacity for the payment of
financial obligations is considered acceptable. May be vulnerable to future
events.
The DBRS® short-term debt rating scale provides an opinion on the risk that
an issuer will not meet its short-term financial obligations in a timely manner.
Ratings are based on quantitative and qualitative considerations relevant to
the issuer and the relative ranking of claims. The R-1 and R-2 rating
categories are further denoted by the subcategories “(high)”, “(middle)”, and
“(low)”. The R-1 (low) rating category denotes good credit quality. The
capacity for the payment of short-term financial obligations as they fall due
is substantial. Overall strength is not as favourable as higher rating
categories. May be vulnerable to future events, but qualifying negative
factors are considered manageable.
S&P A Standard & Poor's issue credit rating is a current 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
Moody’s long-term obligation ratings are opinions of the relative credit risk of
fixed-income obligations with an original maturity of one year or more. They
address the possibility that a financial obligation will not be honored as
promised. Such ratings use Moody’s Global Scale and reflect both the
likelihood of default and any financial loss suffered in the event of default.