Bell Aliant Inc.
TSX : BA

Bell Aliant Inc.

February 22, 2011 09:38 ET

Bell Aliant Inc. Announces $250 Million Offering of Cumulative Rate Reset Preferred Shares

HALIFAX, NOVA SCOTIA--(Marketwire - Feb. 22, 2011) -

THIS MEDIA RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Bell Aliant Inc. ("Bell Aliant") (TSX:BA) announced today that its subsidiary Bell Aliant Preferred Equity Inc. (the "Company") will be issuing 10,000,000 Cumulative Rate Reset Preferred Shares, Series A (the "Series A Preferred Shares"), at a price of $25.00 per Series A Preferred Share, for aggregate gross proceeds of $250 million on a bought deal basis to a syndicate of underwriters led by BMO Capital Markets and Scotia Capital Inc.

The underwriters have been granted an over-allotment option to purchase an additional 1,500,000 Series A Preferred Shares at the offering price. Should the over-allotment option be fully exercised, the total gross proceeds of the Series A Preferred Share offering will be $287.5 million.

The Series A Preferred Shares will pay cumulative dividends of $1.2125 per share per annum, yielding 4.85%, payable quarterly (with the first quarterly dividend to be paid June 30, 2011), for the initial five year period ending March 31, 2016. The dividend rate will be reset on March 31, 2016 and every five years thereafter at a rate equal to the 5-year Government of Canada bond yield plus 2.09%. The Series A Preferred Shares will be redeemable by the issuer on or after March 31, 2016, in accordance with their terms.

Holders of the Series A Preferred Shares will have the right, at their option, to convert their shares into Cumulative Floating Rate Preferred Shares, Series B, (the "Series B Preferred Shares") subject to certain conditions, on March 31, 2016 and on March 31 every five years thereafter. Holders of the Series B Preferred Shares will be entitled to receive cumulative quarterly floating dividends at a rate equal to the three-month Government of Canada Treasury Bill yield plus 2.09%.

The Series A Preferred Shares will be offered for sale to the public in each of the provinces and territories of Canada pursuant to a short form prospectus to be filed with Canadian securities regulatory authorities in all Canadian provinces and territories. The offering is scheduled to close on or about March 9, 2011, subject to certain conditions, including obtaining all necessary regulatory approvals.

The net proceeds of this offering will be used to fund a voluntary $200 million contribution to Bell Aliant's pension plans and for general corporate purposes, including the repayment of indebtedness under Bell Aliant's commercial paper program and the financing of fibre-to-the-home (FTTH) and other investments.

The Series A Preferred Shares have not been, nor will be, registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States or to U.S. persons absent registration or applicable exemption from the registration requirement of such Act and applicable state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to qualification under the securities laws of any such jurisdiction.

Forward-looking Statements

This news release contains forward-looking statements concerning the expected issuance of preferred shares. These statements are based on the current terms of the offering agreement and management's expectations at February 22, 2011. The statements are subject to important risks and uncertainties. Therefore, actual results and events may differ materially from these forward-looking statements, and there can be no assurance that the results or events predicted will be realized. Except as may be required by Canadian securities laws, Bell Aliant disclaims any intention and assumes no obligation to update or revise any forward-looking statement even if new information becomes available, as a result of future events or for any other reason.

About Bell Aliant

Bell Aliant (TSX:BA) is one of North America's largest regional communications providers and the first company in Canada to cover an entire city with fibre-to-the-home (FTTH) technology with its FibreOP™ services. Through its operating entities it serves customers in six Canadian provinces with innovative information, communication and technology services including voice, data, Internet, video and value-added business solutions. Bell Aliant's employees deliver the highest quality of customer service, choice and convenience.

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