April 29, 2016

DBRS greeted news of Husky’s divestment programme with marked restraint:

DBRS views the impact on Husky’s business risk profile as marginally negative due to a lessening in the integration and diversification of the Company’s asset base. The midstream segment has provided a source of stable cash flow partially offsetting the significant erosion in cash flow from oil and gas production activities. DBRS also notes that the Transaction will result in a minor negative impact on Husky’s cash flow (expected 2016 EBITDA contribution from the assets is approximately $180 million; however, Husky will retain a 35% share of EBITDA). However, more importantly, the impact on the Company’s financial risk profile is positive. The Company plans to use the proceeds from the sale to strengthen the Company’s financial position and enhance liquidity. At March 31, 2016, Husky’s total debt was $6.98 billion and the Company had no cash on the balance sheet. For the past 12 month ended March 31, 2016, the Company’s total debt-to-cash flow ratio was 2.90 times (x; up from 2.42x at end of 2015) and total debt in the capital structure was 30.2%. On a pro forma basis, assuming proceeds (before transaction costs) of $1.7 billion are applied to debt reduction, DBRS estimates a total debt-to-cash flow ratio of 2.31x and a ratio of total debt in the capital structure of approximately 24.7%. The Transaction on a stand-alone basis has no immediate impact on the Company’s Issuer Rating and Senior Unsecured Notes and Debentures rating of A (low), the Commercial Paper rating of R-1 (low) and the Preferred Shares – Cumulative rating of Pfd-2 (low).

DBRS at this time maintains a Negative trend on Husky’s ratings as the low oil pricing environment continues to weigh on the Company’s cash flow generation and key credit metrics. However, if the Company successfully completes the asset sale program and/or if oil prices recovery materially, DBRS will review the rating and likely change the trend back to Stable.

HIMIPref™ Preferred Indices
These values reflect the December 2008 revision of the HIMIPref™ Indices

Values are provisional and are finalized monthly
Index Mean
Current
Yield
(at bid)
Median
YTW
Median
Average
Trading
Value
Median
Mod Dur
(YTW)
Issues Day’s Perf. Index Value
Ratchet 4.76 % 5.77 % 11,648 16.98 1 0.1409 % 1,659.8
FixedFloater 6.46 % 5.59 % 19,737 17.02 1 0.0000 % 3,127.2
Floater 4.53 % 4.71 % 49,735 16.01 4 -0.4768 % 1,715.2
OpRet 0.00 % 0.00 % 0 0.00 0 -0.0067 % 2,813.0
SplitShare 4.71 % 5.03 % 68,296 2.51 6 -0.0067 % 3,291.7
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 -0.0067 % 2,568.3
Perpetual-Premium 5.77 % -10.11 % 80,801 0.09 6 0.0263 % 2,595.3
Perpetual-Discount 5.52 % 5.57 % 98,354 14.53 33 0.1393 % 2,648.9
FixedReset 5.12 % 4.83 % 169,213 13.99 88 0.0063 % 1,997.1
Deemed-Retractible 5.17 % 5.60 % 125,995 5.07 33 0.1352 % 2,656.6
FloatingReset 3.17 % 4.91 % 25,320 5.34 17 -0.1230 % 2,083.4
Performance Highlights
Issue Index Change Notes
TRP.PR.I FloatingReset -5.78 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-04-29
Maturity Price : 10.75
Evaluated at bid price : 10.75
Bid-YTW : 4.82 %
TD.PF.C FixedReset -3.00 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-04-29
Maturity Price : 18.77
Evaluated at bid price : 18.77
Bid-YTW : 4.41 %
TD.PF.E FixedReset -2.15 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-04-29
Maturity Price : 20.95
Evaluated at bid price : 20.95
Bid-YTW : 4.52 %
HSE.PR.C FixedReset -1.63 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-04-29
Maturity Price : 17.55
Evaluated at bid price : 17.55
Bid-YTW : 5.99 %
GWO.PR.O FloatingReset -1.58 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 12.45
Bid-YTW : 10.91 %
VNR.PR.A FixedReset -1.43 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-04-29
Maturity Price : 17.89
Evaluated at bid price : 17.89
Bid-YTW : 5.33 %
PWF.PR.Q FloatingReset -1.20 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-04-29
Maturity Price : 12.35
Evaluated at bid price : 12.35
Bid-YTW : 4.32 %
TRP.PR.D FixedReset -1.13 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-04-29
Maturity Price : 17.45
Evaluated at bid price : 17.45
Bid-YTW : 4.92 %
BIP.PR.A FixedReset 1.00 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-04-29
Maturity Price : 19.15
Evaluated at bid price : 19.15
Bid-YTW : 5.93 %
CU.PR.H Perpetual-Discount 1.01 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-04-29
Maturity Price : 23.74
Evaluated at bid price : 24.09
Bid-YTW : 5.53 %
BAM.PF.G FixedReset 1.10 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-04-29
Maturity Price : 20.25
Evaluated at bid price : 20.25
Bid-YTW : 4.91 %
CU.PR.F Perpetual-Discount 1.11 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-04-29
Maturity Price : 20.90
Evaluated at bid price : 20.90
Bid-YTW : 5.48 %
CU.PR.D Perpetual-Discount 1.11 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-04-29
Maturity Price : 22.40
Evaluated at bid price : 22.70
Bid-YTW : 5.47 %
IAG.PR.G FixedReset 1.12 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 20.71
Bid-YTW : 6.53 %
SLF.PR.I FixedReset 1.13 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 19.75
Bid-YTW : 7.03 %
HSE.PR.A FixedReset 1.17 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-04-29
Maturity Price : 11.25
Evaluated at bid price : 11.25
Bid-YTW : 5.80 %
BMO.PR.Y FixedReset 1.22 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-04-29
Maturity Price : 20.75
Evaluated at bid price : 20.75
Bid-YTW : 4.42 %
BMO.PR.Q FixedReset 1.26 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 20.02
Bid-YTW : 6.28 %
TD.PF.A FixedReset 1.40 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-04-29
Maturity Price : 19.57
Evaluated at bid price : 19.57
Bid-YTW : 4.24 %
SLF.PR.J FloatingReset 1.48 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 13.05
Bid-YTW : 10.44 %
Volume Highlights
Issue Index Shares
Traded
Notes
TRP.PR.J FixedReset 96,834 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-05-31
Maturity Price : 25.00
Evaluated at bid price : 25.57
Bid-YTW : 5.05 %
BMO.PR.T FixedReset 58,678 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-04-29
Maturity Price : 19.03
Evaluated at bid price : 19.03
Bid-YTW : 4.32 %
TD.PF.C FixedReset 43,514 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-04-29
Maturity Price : 18.77
Evaluated at bid price : 18.77
Bid-YTW : 4.41 %
W.PR.K FixedReset 22,544 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-04-29
Maturity Price : 23.20
Evaluated at bid price : 25.06
Bid-YTW : 5.18 %
MFC.PR.M FixedReset 21,630 YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 20.10
Bid-YTW : 6.65 %
BAM.PF.G FixedReset 20,168 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-04-29
Maturity Price : 20.25
Evaluated at bid price : 20.25
Bid-YTW : 4.91 %
There were 20 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
TD.PF.C FixedReset Quote: 18.77 – 19.49
Spot Rate : 0.7200
Average : 0.4436

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-04-29
Maturity Price : 18.77
Evaluated at bid price : 18.77
Bid-YTW : 4.41 %

TRP.PR.I FloatingReset Quote: 10.75 – 11.76
Spot Rate : 1.0100
Average : 0.7589

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-04-29
Maturity Price : 10.75
Evaluated at bid price : 10.75
Bid-YTW : 4.82 %

GWO.PR.O FloatingReset Quote: 12.45 – 13.50
Spot Rate : 1.0500
Average : 0.8050

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 12.45
Bid-YTW : 10.91 %

IGM.PR.B Perpetual-Premium Quote: 25.35 – 25.89
Spot Rate : 0.5400
Average : 0.3487

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2018-12-31
Maturity Price : 25.00
Evaluated at bid price : 25.35
Bid-YTW : 5.37 %

ELF.PR.H Perpetual-Discount Quote: 23.87 – 24.33
Spot Rate : 0.4600
Average : 0.2897

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-04-29
Maturity Price : 23.43
Evaluated at bid price : 23.87
Bid-YTW : 5.79 %

BNS.PR.C FloatingReset Quote: 21.51 – 21.94
Spot Rate : 0.4300
Average : 0.2724

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 21.51
Bid-YTW : 5.26 %

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