BCE Inc.

The stable outlook is based on the strength of the company's operations, which, combined with good cost control, should help spur annual organic EBITDA growth. In addition, we expect the company to generate about C$1 billion of annual discretionary cash flow after dividends, providing BCE with sufficient liquidity to fund its wireless spectrum acquisitions. Based on these assumptions, S&P Global Ratings expects BCE's adjusted debt-to-EBITDA ratio to remain close to 3x through 2020. We could lower the ratings over the next two years if BCE's adjusted debt-to-EBITDA ratio rises above 3.25x (a revision from our previous threshold of 3.00x) with poor prospects for deleveraging. We believe that such a scenario could occur in the near term if the company were

...BCE is the largest telecom provider in Canada. BCE Inc.'s subscriber base of 18.68 million customers is supported by the company's position in fixed-line broadband and voice (No. 1), wireless (No. 2), video (No. 1), and broadcast television/media (No. 1). The company's C$10 billion EBITDA is supported by the BCE's strong franchise with solid brand(s), broad distribution, well-upgraded networks, quad-product bundling capability, and healthy revenue diversity among residential and business customers. Organic cash flow will continue to support capex and spectrum acquisitions.BCE's EBITDA growth (2%-4%; organic and excluding the impact of International Financial Reporting Standards [IFRS]-16 ) is supported by the growth in both wireless and wireline, especially broadband operations combined with cost efficiency. With run-rate annual capex close to C$4 billion and upcoming 2020 and 2021 spectrum auctions, S&P Global Ratings expects BCE's cash flow to fund the company's growth spending. We forecast...

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