In August 2001, BCE Inc. and Bell Canada launched the first Canadian extendible corporate commercial paper programs, under which the two companies can respectively issue up to $360 million and $400 million of extendible short term notes. These amounts represent 20 per cent of the maximum principal amounts of short term notes that each company may have outstanding at any one time.
Unlike traditional commercial paper, the extendible short term notes are not entitled to the benefit of the liquidity protection of back-up lines of credit. Instead they are extendible, at the option of BCE Inc. or Bell Canada, for up to 180 days from their stated date of maturity in the event of a refinancing disruption. Furthermore, the extendible short term notes are, following extension, entitled to interest payments and are redeemable, at the option of BCE Inc. or Bell Canada, at any time during the refinancing disruption period and must be redeemed upon cessation of the refinancing disruption or upon a rating downgrade by DBRS or S&P below a certain rating threshold. BCE Inc. and Bell Canada’s new commercial paper programs mark the first time any Canadian company has used the extension concept to sell corporate commercial paper.
Acting for BCE Inc. and Bell Canada was Ildo Ricciuto, Assistant General Counsel, Compliance, together with a team from Stikeman Elliott comprised of Jean Marc Huot, Louis Morisset and Robert Carelli.