BCE Inc, parent of Bell Canada Inc, and 52% shareholder in Northern Telecom Ltd, has had its ratings lowered by Moody’s Investors Service Inc in the wake of Canada’s regulator deciding to deny Bell Canada’s application for rate relief and to lower its rate of return. Moody’s cut its rating on the senior secured debt of BCE Inc’s Bell Canada to double-A-3 from double-A-2, and its ratings on the company’s senior unsecured debt to A1 from Aa3. About $4,400m of debt, denominated in Canadian, US and Swiss currency, is affected, Moody’s said, noting that since its application was denied, Bell Canada has steadily lost market share to rivals who are competing principally on lower prices, and concluding that it expects pressure on BCE’s credit quality to continue as competition intensifies.
