Telus 2015 Annual Report Download - page 29

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September 15, 2015. Such purchases will be made through the facilities of the TSX, the
NYSE and alternative trading platforms or otherwise as may be permitted by applicable
securities laws and regulations. This represents up to 2.7% of outstanding TELUS
Common Shares prior to the commencement of the 2016 NCIB. The Common Shares
will be purchased only when and if we consider it advisable.
On November 19, 2014, we filed a shelf prospectus, in effect until December 2016,
pursuant to which we may offer up to $3 billion of long-term debt or equity securities. As
of March 10, 2016, we can offer up to $250 million of debt or equity securities under the
existing shelf prospectus.
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 Section 7.5 - Liquidity and capital resource measures to Section 7.8 - Credit
ratings in the 2015 annual MD&A.
Credit ratings are important to our borrowing costs and ability to obtain short-term and
long-term financing and the cost of such financing. Credit ratings are intended to provide
investors with an independent measure of the credit quality of an issue of securities and
are indicators of the likelihood of payment and of the capacity of a company to meet its
financial commitment on the rated obligation in accordance with the terms of the rated
obligation. A reduction in the current rating on our debt by rating agencies, particularly a
downgrade below investment grade ratings or a negative change in ratings outlook could
adversely affect our cost of financing and our access to sources of liquidity and capital.
We believe our 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, 2015, TCI is a party to an agreement
expiring in December 2016, 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 trade
receivables up to a maximum of $500 million. TCI is required to maintain at least a BB
credit rating by DBRS Ltd. (DBRS) or the securitization trust may require the sale
program to be wound down.
The rating agencies regularly evaluate TELUS and 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. In May
2015, DBRS announced a downgrade to its long-term rating of TELUS, but such revised
rating is still consistent with our objective of maintaining investment grade credit ratings
in the range of BBB+ or the equivalent. DBRS had also downgraded its short-term credit
rating for TELUS, which limits our ability to access the commercial paper markets in
Canada. We expect to be able to continue to access short-term funding from other
available sources, including the U.S. commercial paper market. On November 30, 2015,
Moody’s Investors Service Inc. (Moody’s) affirmed the Company’s senior unsecured
ratings, but changed the outlook to negative from stable.