TELUS closes its US$ and CAD$ junior subordinated notes offerings, raising CAD$2.9 billion to support balance sheet deleveraging

Executive Summary

• TELUS closed US$1.5 billion and CAD$800 million junior subordinated notes offerings, raising a total of CAD$2.9 billion to fund debt tender offers, repay existing indebtedness and support general corporate purposes.
• Proceeds will be used to purchase up to CAD$500 million of outstanding 3.95%–4.75% notes under a tender offer and to redeem the remaining CAD$600 million of 3.75% notes due March 2026, advancing TELUS’s leverage‑reduction targets (≈3.3× by end‑2026, ≈3× by year‑end 2027).
• The closing reinforces TELUS’s capital management strategy and its outlook to deliver ≥10 % CAGR free cash flow through 2028 while maintaining dividend payments.

Key Details

• Offering amounts: US$1.5 billion (Fixed‑to‑Fixed Rate Junior Subordinated Notes, “US Notes”) + CAD$800 million (Fixed‑to‑Fixed Rate Junior Subordinated Notes, “Canadian Notes”).
• Total net proceeds: Approximately CAD$2.9 billion.
• Underwriters / agents: Syndicate led by CIBC Capital Markets, BMO Capital Markets, TD Securities; US syndicate also included Wells Fargo Securities.
• Use of proceeds – Tender Offer: Up to CAD$500 million to purchase cash‑settled outstanding notes (Series CAB 3.95% due Feb 2050, Series CAE 4.10% due Apr 2051, Series CU 4.40% due Jan 2046, Series CL 4.40% due Apr 2043, Series CW 4.70% due Mar 2048, Series CAF 2.85% due Nov 2031, Series CR 4.75% due Jan 2045).
• Use of proceeds – Debt repayment: Redemption of CAD$600 million aggregate principal amount of 3.75% Notes, Series CV due Mar 2026; remaining funds for other outstanding indebtedness and general corporate purposes.
• Leverage targets: Aim to reach ≈3.3× leverage ratio by close of 2026; target ≈3× by year‑end 2027.
• Financial outlook statements: Expect free cash flow CAGR ≥10 % through 2028; maintain dividend at nominal level; step down Discounted DRIP beginning Q1 2026.

Notable Quotes

“Our successful cross‑currency hybrid note offerings reinforce our proactive approach to capital management and commitment to deleveraging, while maintaining the financial flexibility to support our capital allocation priorities,” – Darren Entwistle, President & CEO, TELUS.