Moody’s revises Telus view to stable

Moody's Investors Service said it confirmed Telus Corp.’s Baa1 senior unsecured ratings and changed the ratings outlook to stable from under review down.

As part of the same action, the agency affirmed Telus' Prime-2 commercial paper rating.

The action concludes a review initiated on May 31.

Moody's said the rating was confirmed and stabilized at Baa1 because management is committed to reducing leverage into its policy range (2 times to 2.5 times company-defined net debt-to-EBITDA) over the mid-term, which Moody's interprets as being by 2018, with EBITDA growth more than offsetting expected negative free cash flow and debt increases.

Telus' capital spending is elevated as a result of a fibre optic network upgrade, which the agency said it views as being strategically appropriate, although shareholder payments are high at the same time and the combination pressures cash flow and deleveraging plans.

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