S&P revises Telus view to negative

S&P said it revised the outlook on Telus Corp. to negative from stable. At the same time, the agency affirmed all its ratings on Telus, including its BBB+ issuer credit and issue-level ratings.

Telus plans to buy Competence Call Center for about C$1.3 billion, mostly through debt. Pro forma this acquisition, combined with the recently closed ADT Canada purchase, S&P said it forecasts S&P Global Ratings’ adjusted debt-to-EBITDA for Telus to be about 3.2x.

“The negative outlook on Vancouver-based diversified communications provider Telus and its 100%-owned subsidiary Telus Communications Inc. (collectively, Telus) reflects our view that Telus’ credit measures (specifically debt-to-EBITDA) will remain close to our downside threshold of 3.25x. Even though we expect the company’s revenues and EBITDA to increase at a modest pace, the recent acquisitions combined with capital investments as well as spectrum purchases and large dividend payments, will keep the company’s credit measures elevated for the next 24 months,” said S&P in a press release.

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