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TD Securities Inc. & Telus Corporation - MRRS Decision
Headnote
Mutual Reliance Review System for Exemptive Relief Applications - issuer is a connected, but not a related issuer, inrespect of a registrant that is an underwriter in a proposed distribution of debentures by the issuer, and other registrantsthat may participate in the proposed distribution of debentures - underwriter exempt from the independent underwriterrequirement in the legislation provided that the issuer is not in financial difficulty.
Applicable Ontario Regulations
Regulation made under the Securities Act, R.R.O. 1990, Reg. 1015, as am., ss. 219(1), 224(1)(6) and 233.
Applicable Ontario Rules
Proposed Multi-Jurisdictional Instrument 33-105: Underwriting Conflicts (1998), 21 OSCB 788.
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ONTARIO, BRITISH COLUMBIA, ALBERTA, QUEBEC AND NEWFOUNDLAND
AND
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM FOR
EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF
TD SECURITIES INC. AND
TELUS CORPORATION
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of Ontario, BritishColumbia, Alberta, Québec and Newfoundland (the "Jurisdictions") has received an application from TD Securities Inc.(the "Filer") for a decision, pursuant to the securities legislation of the Jurisdictions (the "Legislation"), that therequirement (the "Independent Underwriter Requirement") contained in the Legislation which restricts a registrant fromacting as an underwriter in connection with a distribution of securities of an issuer made by means of prospectus, wherethe issuer is a connected issuer (or the equivalent) of the registrant unless a portion of the distribution at least equal tothat portion underwritten by non-independent underwriters is underwritten by an independent underwriter, shall not applyto the Filer or to certain Lender-Owned Underwriters (as defined below) in respect of a proposed distribution (the"Offering") of senior unsecured debentures (the "Debentures") of TELUS Corporation (the "Corporation"), to be madeby means of a prospectus supplement (the "Prospectus Supplement") to a short form base shelf prospectus (the"Prospectus") expected to be filed with the Decision Makers in each of the provinces of Canada;
AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the"System"), the Ontario Securities Commission is the principal regulator for this application;
AND WHEREAS the Filer has represented to the Decision Makers that:
1. The Filer is registered under the Securities Act (Ontario) (the "Act") in the categories of "investment dealer" and"broker" and is not in default of any of its terms of registration. The Filer's head office is in Ontario.
2. The Corporation is a corporation formed under the Company Act (British Columbia) on October 26, 1998. TheCorporation maintains its registered office at 21st Floor, 3777 Kingsway, Burnaby, British Columbia.
3. The Corporation is a leading Canadian telecommunications company that provides a full range ofcommunications products and services. For the year ended December 31, 2001, the Corporation had operatingrevenues of approximately $6.4 billion and net income of approximately $461.0 million. As at December 31,2001, the Corporation had assets of approximately $16.4 billion and long term debt of approximately $3.0billion.
4. The voting and non-voting common shares of the Corporation are listed on The Toronto Stock Exchange underthe symbols "T" and "T.A.", respectively, and the non-voting common shares of the Corporation are listed onthe New York Stock Exchange under the symbol "TU".
5. As at April 30, 2001, the Corporation has a market capitalization of approximately $9.7 billion.
6. The Corporation is a reporting issuer under the Legislation and is not in default of any requirements of theLegislation.
7. The Filer is proposing to act as lead underwriter in connection with the Offering. While the other members ofthe underwriting syndicate have not yet been determined, no other underwriter will underwrite a greaterpercentage of the Offering than the Filer.
8. The Debentures will be offered concurrently in the United States, under the Canada-U.S. Multi-JurisdictionalDisclosure System (the "MJDS").
9. It is expected that the Corporation may issue Debentures having an aggregate principal amount of up to $6.0billion through the Offering.
10. It is anticipated that the Debentures will receive a rating of "Baa2" from Moody's and "BBB+" from Standard& Poor's.
11. The Corporation is a party to a $6.5 billion credit facility (the "Credit Facility") with a syndicate of banks includingThe Toronto-Dominion Bank (collectively, the "Lenders"). The Credit Facility consists of: (i) a $5.0 billionnon-revolving bridge facility (as at December 31, 2000, $4.0 billion drawn and $1.0 billion available); and (ii)a $1.25 billion revolving facility (as at December 31, 2000, undrawn) that matures on October 19, 2001. TheCorporation is a party to other bank facilities with an aggregate commitment of approximately $200.0 million.
12. The Corporation is and has been in compliance with the terms of the Credit Facility and is not in financialdifficulty.
13. The net proceeds of the Offering will be used to repay a portion of the Corporation's outstanding indebtednessunder the Credit Facility.
14. TD Securities is a wholly-owned subsidiary of The Toronto-Dominion Bank. The investment banking affiliatesof certain of the other Lenders (the "Lender-Owned Underwriters") will be invited to participate in theunderwriting syndicate established for the Offering.
15. The Lenders did not participate in the decision to make the Offering and will not participate in the determinationof the terms of the distribution.
16. Neither the Filer nor any of the Lender-Owned Underwriters that may participate in the Offering will benefit inany manner from the Offering other than by the payment of their fees in connection with the distribution.
17. By virtue of the Credit Facility, the Corporation may, in connection with the Offering, be considered a "connectedissuer" (or the equivalent) of the Filer and the Lender-Owned Underwriters.
18. The Corporation is not a "related issuer" (or the equivalent) of the Filer or any of the Lender-OwnedUnderwriters.
19. The nature and details of the relationship between the Corporation and the Filer and the Lender-OwnedUnderwriters that participate in the Offering will be described in the Prospectus Supplement. The ProspectusSupplement will contain the information specified in Appendix "C" of proposed Multi-Jurisdictional Instrument33-105 Underwriting Conflicts (the "Proposed Instrument").
20. The Corporation is in good financial condition and is not under any immediate financial pressure to proceed withthe Offering and has not been requested or required by the Lenders to repay the amounts owing under theCredit Facility. The Corporation is not a "specified party" as defined in the Proposed Instrument.
AND WHEREAS pursuant to the System this MRRS Decision Document evidences the decision of eachDecision Maker (collectively, the "Decision");
AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that providesthe Decision Maker with the jurisdiction to make the Decision has been met;
THE DECISION of the Decision Makers, pursuant to the Legislation, is that the Independent UnderwriterRequirement shall not apply to the Filer or the Lender-Owned Underwriters in connection with the Offering, provided that,at the time of the Offering:
A. the Corporation is not a related issuer as defined in the Proposed Instrument of the Filer or anyLender-Owned Underwriter; and
B. the Corporation is not a specified party as defined in the Proposed Instrument.
May 18, 2001.
"J.A. Geller" "R. Stephen Paddon"