BT 04 The State Of The Market

Debt investors

Like most large businesses, BT funds its operations through equity and debt as well as from funds generated from its trading activities. Below are details of BT’s listed debt (debt quoted and traded on stock exchanges) and credit ratings.

BT’s credit rating

More information on credit ratings

Ratings represent an evaluation of credit quality, conducted by independent financial analysis firms. Credit ratings and research can help investors assess marketplace value and degree of investment risk.

Standard & Poor’s (S&P), Moody’s and Fitch are leading global credit rating, research and risk analysis operations. Their highest long-term rating is AAA/Aaa and the lowest is C. Moody’s uses numerical modifiers (1, 2, 3) in each rating classification while S&P and Fitch use plus and minus signs.

Short-term ratings by these agencies assess the ability of the company to repay short-term debt obligations. A1/P1/F1 ratings (highest short-term rating) by S&P, Moody’s and Fitch respectively indicate a superior ability to repay short-term debt obligations; A2/P2/F2 indicates satisfactory ability and A3/P3/F3 indicates adequate ability to meet the short-term financial liabilities.

The same rating from different firms may not mean exactly the same thing. Each firm will use different techniques and subjective assessment in formulating ratings opinions.

Financing strategy

The group funding policy is to raise and invest funds centrally to meet anticipated requirements using a combination of capital market bond issuance, commercial paper borrowing, committed borrowing facilities and investments. These are planned so as to mature at different stages in order to meet short, medium and long-term requirements. When market conditions allow, we believe that it’s prudent to pre-fund larger maturities. Our policy is to raise debt in markets/ currencies where there is strong investor demand and we get the best rate, if that is outside of the UK then we will swap the debt immediately into fixed sterling to mitigate currency risk.

Summary charts of BT debt

Outstanding
(GBP / USD
/ EUR, m)

BT Bond 2080 €500mn
(EUR)

* For the hybrid bond issued 18 Feb 2020, this date represents the non-call date, not maturity date

BT Bond 2020
£300m

BT Bond 2028
£600m

BT Bond 2031
£500m (EMTN)

BT Bond 2033
£330m (EMTN)

BT Bond 2037
£500m (EMTN)

BT Bond 2039
£330m (EMTN)

BT Bond 2042
£340m (EMTN)

BT Bond 2047
£250m (EMTN)

BT Bond 2023
$0.675bn

BT Bond 2028
$0.7bn

BT Bond 2029
$1bn

BT Bond 2030
$2.8bn

BT Bond 2030
$0.5bn

Bond listing prospectus – November 2020

Disclaimer – Important

The information contained on the following pages of the website is restricted and is not for release, publication or distribution in or into the United States (“U.S.”) or any other jurisdiction where the communication of such information is restricted by law.

None of the information contained in the following pages of the website constitutes an offer of, or an invitation to purchase, any security, nor any investment advice or services. These materials are provided for information purposes only.

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