Télébec and NorthernTel seek debentureholder consents for amendments
HALIFAX,
Télébec, Limited Partnership ("Télébec") and NorthernTel, Limited Partnership ("NorthernTel") have
mailed meeting notices and information circulars to their debentureholders seeking consent for
certain trust indenture amendments. These amendments are required to facilitate a proposed transfer
(the "Asset Transfer") of all or substantially all of the assets and undertaking of Télébec and
NorthernTel to Bell Aliant Regional Communications, Limited Partnership ("Bell Aliant LP").
Due to changes to the Income Tax Act (Canada) that are scheduled to
take effect on January 1, 2011, Bell Aliant Regional Communications
Income Fund ("Bell Aliant") and certain of its subsidiaries are planning to implement a transaction
(the "Conversion Transaction") to convert Bell Aliant's income trust structure into a corporate
structure. Télébec and NorthernTel are wholly owned by Bell Aliant. While Télébec and NorthernTel
are not parties to the Conversion Transaction, it would further simplify the Bell Aliant group's
organizational structure if the businesses currently carried on by these partnerships, or either of
them, were combined with the business carried on by Bell Aliant LP. However, Bell Aliant LP will not
assume the obligations of Télébec and NorthernTel under their respective trust indentures and the
Asset Transfer will not proceed without the amendments currently being sought.
Under the proposed transaction, there will be no change to the interest rate, interest payment
schedule or maturity date of any outstanding Télébec and NorthernTel debentures (the "Debentures")
Bell Aliant LP, Télébec and NorthernTel believe that the amendments and the proposed Asset Transfer
will benefit the debentureholders. More particularly, the indenture amendments will result in the
Debentures having principal covenants that are, to the greatest extent possible, equivalent to those
of Bell Aliant LP's medium term notes ("MTNs") and we believe they will result in the following
- Guarantee by Bell Aliant group: debentureholders will gain guarantees
of the Debentures by entities in the Bell Aliant group comparable to
those that exist for Bell Aliant LP's MTNs;
- Stronger counterparty: the indebtedness under the Debentures will be
assumed by Bell Aliant LP, which is a much larger entity with greater
financial resources than either Télébec and NorthernTel;
- Increased information flow: compared to Télébec and NorthernTel, there
will be more visibility into the financial and operating performance of
Bell Aliant LP and its guarantors through their continuous disclosure
records, which are available on SEDAR at www.sedar.com;
- Credit rating: it is anticipated that the Debentures should carry the
same credit ratings as they currently have and as Bell Aliant LP's
MTNs; and
- Enhanced liquidity: as indebtedness of Bell Aliant LP, it is possible
that the debentures may be more readily tradeable and therefore have
enhanced liquidity and value.
The notices of meeting set out a meeting date of November 1, 2010. However, if, prior to the meeting date,
the necessary consents are received in writing from the requisite majority of debentures outstanding (66 2/3
per cent for Télébec and 75 per cent for NorthernTel) the amendments will be approved and the meetings
will be cancelled. There are currently $100 million principal amount of Télébec and $37.7 million principal
amount of NorthernTel debentures outstanding.
Bell Aliant has engaged National Bank Financial Inc. as sole financial advisor and to assist in seeking
debentureholder consents in association with the proposed indenture amendments.
Forward-looking statements
This news release contains forward-looking statements concerning future events and expectations,
specifically relating to the proposed indenture amendments and Asset Transfer. These statements describe
management's expectations at September 30, 2010. The purpose of forward-looking information is to
provide the reader with information about management's expectations and plans regarding future events.
Readers are cautioned that such information may not be appropriate for other purposes. These statements
are based on management's beliefs regarding future events, and are subject to risks and uncertainties that
are beyond management's control. Therefore, actual events may differ materially from what is predicted.
Assumptions made and risk factors considered in preparing these forward-looking statements are
discussed in detail in the information circulars mailed to Télébec and NorthernTel debentureholders, and in
Bell Aliant's fourth quarter 2009 earnings and 2010 guidance news release dated February 3, 2010, as well
as in Bell Aliant's and Bell Aliant Regional Communications Holdings, Limited Partnership's 2009 annual
management's discussion and analysis (MD&A) and annual information forms, and their first and second
quarter 2010 MD&As, as well as in Bell Aliant's information circular dated May 7, 2010, which are available
at www.bellaliant.ca or at www.sedar.com. Some of the risk factors which could cause results or
events to differ materially from expectations include but are not limited to: ability to realize anticipated
benefits of the Asset Transfer and indenture amendments, no assurance of a trading market for the
Debentures, no assurance of credit ratings assigned to the Debentures, and additional risks related to Bell
Aliant LP and the Bell Aliant group. All forward-looking statements in this news release are qualified by
these cautionary statements, and there can be no assurance that the results or events predicted will be
realized. Except as may be required by Canadian securities laws, Bell Aliant disclaims any intention and
assumes no obligation to update or revise any forward-looking statement even if new information becomes
available, as a result of future events or for any other reason. Readers should not place undue reliance on
any forward-looking statements.
This news release is for informational purposes only and does not constitute an offer to sell or a solicitation
of an offer to purchase securities of Bell Aliant LP, Télébec or NorthernTel in any jurisdiction.
About Bell Aliant
Bell Aliant (TSX: BA.UN) is one of North America's largest regional communications providers and the first
company in Canada to cover an entire city with fibre-to-the-home (FTTH) technology with its FibreOP(TM)
services. Through its operating entities it serves customers in six Canadian provinces with innovative
information, communication and technology services including voice, data, Internet, video and value-added
business solutions. Through its xwave offices, Bell Aliant also provides IT professional services and
advanced technology solutions. Bell Aliant's employees are committed to deliver the highest quality of
customer service, choice and convenience. More information can be found at www.bellaliant.ca.
%SEDAR: 00023938EF
For further information:
Media Relations: Alyson Queen, 866-696-6700, alyson.queen@bellaliant.ca;
Investor Relations: Zeda Redden, 877-487-5726, zeda.redden@bellaliant.ca
SOURCE Bell Aliant