Telus 2015 Annual Report Download - page 31

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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
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.
Obligations rated Baa are subject to moderate credit risk. They are
considered medium grade 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 or to Long-Term rating below ‘B’.
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.