This doesn't change the fact that the LBO of BCE will cost taxpayers $800 million a year in lost tax revenue

Sinking loonie boosts BCE takeover

Andrew Willis, October 22, 2008
Globe and Mail


The lame duck loonie is providing a boost to U.S. lenders and backers of the BCE buyout and other cross-border takeovers.
With the Canadian dollar nosediving to 79.7 cents (U.S.) on Wednesday after hitting a high of $1.10 last November, three U.S. private equity funds investing in BCE and three global banks lending on the $35-billion (Canadian) buyout are seeing a material decline in the cost of their financing commitment. Sources working on the takeover say the recent currency move makes it more likely that the long-awaited transaction will close, as scheduled, by Dec. 11.
There are no currency hedges in place at the three equity funds backing the Ontario Teachers Pension Plan bid for Canada's largest telecom company, according to sources close to BCE. So, Providence Equity Partners, Madison Dearborn Partners and an arm of Merrill Lynch are all getting a boost from the weak Canadian dollar.
The same benefits could exist at Citigroup, Royal Bank of Scotland and Deutsche Bank, three of the four lenders to BCE. All of these banks would fund the transaction in U.S. dollars. However, sources say these banks may have hedged their currency exposure at some point since the deal was consummated, back in June, 2007. The fourth lender is Toronto-Dominion Bank, which does business in Canadian dollars. Earlier this week, U.K. websites quoted Royal Bank of Scotland officals reaffirming their intention to lend to the BCE buyout group.
The planned $361-milion takeover of tech play Q9 Networks by Boston-based private equity firm ABRY Partners also gets a boost from the currency move, though again, the benefit is lost on ABRY's major lender, TD Bank.