The Negative Impacts of Bell Going Private


While I talked at length about the benefits of Bell Canada going private, Financial Post has illustrated that there is considerable backlash from bond investors which have even led to some taking the deal to court.  Here is a quick summary of why:

BCE bonds for years have been among the most widely held investments in Canada. But Bell’s credit rating is expected to fall to junk status with the buyout, which will add US$34-billion to its balance sheet while leaving much of the existing debt intact. When that happens, many bond managers will be forced to sell — locking in losses — as their investment criteria do not allow them to hold junk debt.

If you want to read more, the follow this link to the FP article.

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