BCE Inc T.BCE.PR.E

A good project

[Gabriel]

Decisions in infrastructure economics are based on how the proposed ”project” compares to the counterfactual or do-nothing.

 

The “project’ is Bell selling its minority stake in MLSE, a platform producing next to no cash, and putting $4.2B in proceeds into cash-generating Ziply: $400m EBITDA (~ 0.5$ EBITDA/sh) projected to grow 11%, a rate hard to match in Canada as Bell throttled back planned spending on its domestic fibre network by $1B in the face of unfair rulings on network sharing from Canadian regulators. The « project » is also to double Ziply’s fibre reach to 3m locations by 2028 without increasing Bell’s overall capital spending. 

Moody’s said the Ziply purchase is “credit positive” for Bell, and “will help Bell expand its geographic footprint and the operator will become the third largest fibre provider in North America with improved revenue and EBITDA growth trajectory.”

[Quintessential1]

Sounds like a credit upgrade may be coming. Moody’s said the Ziply purchase is “credit positive” for Bell, and “will help Bell expand its geographic footprint and the operator will become the third largest fibre provider in North America with improved revenue and EBITDA growth trajectory.” GLTA