Barnaby, British Columbia-based
recently entered a
foreign exchange swap to convert a pair of multi-billion dollar
U.S. bonds into a synthetic Canadian dollar liability.
Gardner, director of finance,
said, "it's become a pure Canadian dollar liability. It's fully
hedged." TELUS executed a six-year swap that matches the six-year
USD1.3 billion 7.5% notes and a 10-year swap that matches its 2011
USD2 billion 8% notes.
In the swap TELUS receives Canadian dollars at a
fixed rate for the duration of the swap, in exchange for U.S
dollars, Gardner said, declining to detail the rate. It makes sense
for the company to swap the U.S. dollars into Canadian dollars
because it operates solely in Canada and all its revenues are in
Canadian dollars. The counterparties in the swap are
Toronto Dominion Securities
Morgan. Gardner said both
firms also were the main underwriters for the bond offerings.
Spokesmen at the firms did not return calls.
The proceeds from the issues were used to repay
existing short-term bank debt and for general corporate and working
capital purposes, according to Gardner. It has CAD9 billion in
outstanding debt. TELUS provides telecommunication services in
Western Canada. It also provides voice, data, Internet and wireless
services to central and eastern parts of the country.