{"id":40622,"date":"2020-03-26T22:13:07","date_gmt":"2020-03-27T03:13:07","guid":{"rendered":"http:\/\/prefblog.com\/?p=40622"},"modified":"2020-03-26T22:13:07","modified_gmt":"2020-03-27T03:13:07","slug":"hse-has-negative-outlook-at-sp","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=40622","title":{"rendered":"HSE Has Negative Outlook At S&#038;P"},"content":{"rendered":"<p>Standard &#038; Poor&#8217;s <a href=\"https:\/\/www.standardandpoors.com\/en_US\/web\/guest\/article\/-\/view\/type\/HTML\/id\/2402494\">has announced<\/a>:<\/p>\n<blockquote>\n<ul>\n<li>S&#038;P Global Ratings lowered its West Texas Intermediate (WTI) and Brent crude oil price assumptions on March 19, 2020, which initiated a global review of its rated oil and gas issuers.\n<li>We lowered our 2020 WTI price to US$25 from US$35 and lowered our Brent price to US$30 from US$40.\n<li>The reduced 2020 price assumptions, in conjunction with the lower 2021 and 2022 prices published on March 9, translate into materially lower revenue and cash flow forecasts for Husky.\n<li>Our projected three-year (2020-2022) weighted-average funds from operations (FFO)-to-debt and discretionary cash flow (DCF)-to-debt ratios have weakened relative to those we previously forecast.\n<li>S&#038;P Global Ratings revised its outlook on Husky to negative from stable and affirmed its &#8216;BBB&#8217; long-term issuer credit and senior unsecured debt ratings on the company.\n<li>The negative outlook reflects S&#038;P Global Ratings&#8217; view that there is increased risk Husky&#8217;s cash flow metrics could deteriorate below the minimum level required to support the &#8216;BBB&#8217; credit rating.<\/ul>\n<p><b>&#8230;<\/b><br \/>While we acknowledge the counterbalancing benefits of the company&#8217;s downstream segment, including midstream assets, the upstream segment&#8217;s revenues and profitability continue to dominate the company&#8217;s credit profile. Moreover, the company&#8217;s heavy oil-dominant upstream product mix exposes its financial performance to additional volatility, given the persistent weakness of Canadian heavy oil prices.<br \/><b>&#8230;<\/b><br \/>We would lower the rating to &#8216;BBB-&#8216;, if Husky&#8217;s weighted-average FFO-to-debt ratio decreased below 30%, and we expected the cash flow ratio would remain at this weakened level for a sustained period. Nevertheless, we believe Husky&#8217;s participation in several industry sectors, and the integration benefits of its downstream operations, should continue to support an investment-grade rating.<\/p>\n<p>We would revise the outlook to stable, if Husky is able to improve and sustain its three-year weighted-average FFO-to-debt ratio at the upper end of the 30%-45% range. In the absence of material operating efficiency gains, we believe this ratio improvement would only occur in tandem with strengthening hydrocarbon prices.<\/p><\/blockquote>\n<p>Several other ratings actions were taken on Canadian oil companies:<\/p>\n<ul>\n<li>Cenovus downgraded one notch to BBB-, Negative Outlook\n<li>Canadian Natural Resources downgraded one notch to BBB, Stable Outlook\n<li>Suncor downgraded one notch to BBB+, Stable Outlook\n<li>Ovintiv Canada LLC downgraded one notch to BBB-, Negative Outlook<\/ul>\n<p>Husky remains with its Issuer Rating of BBB, although the Outlook has now turned negative. The preferreds remain at P-3(high).<\/p>\n<p>Affected issues are HSE.PR.A, HSE.PR.B, HSE.PR.C, HSE.PR.E and HSE.PR.G .<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Standard &#038; Poor&#8217;s has announced: S&#038;P Global Ratings lowered its West Texas Intermediate (WTI) and Brent crude oil price assumptions on March 19, 2020, which initiated a global review of its rated oil and gas &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-40622","post","type-post","status-publish","format-standard","hentry","category-issue-comments"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/40622","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=40622"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/40622\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=40622"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=40622"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=40622"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}