Telus Launches $800 Million Junior Subordinated Notes to Strengthen Financial Strategies
- TELUS prices $800 million in junior subordinated notes to optimize its debt profile and support corporate strategies.
- Series CAR notes have a 6.25% interest rate, while Series CAS notes carry a 6.75% interest rate.
- Proceeds will reduce debt and fund corporate purposes, reflecting TELUS's focus on financial prudence and capital allocation.
Telus Expands Financial Strategies with New Junior Subordinated Notes Offering
On June 16, 2025, TELUS Corporation announces the pricing of its $800 million re-opening of fixed-to-fixed rate junior subordinated notes, specifically Series CAR and Series CAS, maturing on July 21, 2055. This financial maneuver, facilitated by a syndicate led by CIBC World Markets Inc., Scotia Capital Inc., and TD Securities Inc., reflects TELUS's proactive approach to managing its debt profile while supporting its ongoing corporate strategies. The offering is set to close around June 19, 2025, marking a significant development in the company's capital structure.
The Series CAR junior subordinated notes, which carry a 6.25% interest rate, are priced at $102.625 per $100 principal. They offer a re-opening yield of 5.612% per annum until July 21, 2030, after which the interest will reset every five years based on the prevailing Government of Canada rate plus 3.482%, ensuring a minimum interest rate of 6.25%. Meanwhile, the Series CAS notes, with a 6.75% interest rate, are priced at $104.500 per $100 principal and provide a re-opening yield of 6.127% until July 21, 2035. Following this period, interest will also reset every five years, based on a similar structure. This strategic debt management not only enhances TELUS's liquidity but also positions the company favorably within the competitive telecommunications landscape.
The net proceeds from this offering are earmarked for reducing outstanding indebtedness, including commercial paper, and for general corporate purposes. Any unallocated funds will be invested in short-term, investment-grade securities or bank deposits, which reflects TELUS's commitment to maintaining financial prudence and optimizing its capital allocation strategy. Notably, credit rating agencies assign 50% equity credit to these junior subordinated notes, further solidifying their role in TELUS's overall financial health and investment profile.
In addition to this bond offering, TELUS continues to focus on enhancing its service portfolio and customer experience. As a leader in the telecommunications sector, the company is expected to leverage these financial strategies to invest in network enhancements and innovative solutions that meet the evolving demands of its customers. The emphasis on financial stability and long-term growth aligns with TELUS's mission to connect Canadians through advanced technology and services.
This announcement does not constitute an offer to sell or solicit an offer to buy the securities, which have not been registered under the U.S. Securities Act of 1933, and are not being offered in the United States or for U.S. persons. As TELUS navigates the complexities of the telecommunications industry, its recent financial maneuvers highlight a commitment to sustainable growth and operational excellence.