DBRS confirms BCE, Bell Canada

DBRS said it confirmed the A (low) long-term ratings and R-1 (low) short-term ratings of BCE Inc. and its wholly owned operating subsidiary, Bell Canada. The agency also confirmed BCE's unsecured debentures at BBB (high), its preferred shares at Pfd-3 (high), Bell Canada's debentures at A (low) and its subordinated debentures at BBB.

The trend is stable.

The confirmation follows Bell Canada's announcement that it will acquire 85% of CTVglobemedia Inc. and its television, digital media and radio operations for C$1.3 billion in equity value. BCE/Bell Canada plans to fund the acquisition with a combination of new debt at Bell Canada, cash on hand, BCE shares and the assumption of some residual CTV debt.

The agency said that from a financial perspective, the acquisition of CTV will slightly weaken Bell Canada's credit metrics, but DBRS believes the impact will be manageable. DBRS anticipates that Bell Canada's gross debt-to-EBITDA ratio will increase from its June 30 level, 1.52 times, but not beyond 2 times.

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