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Suncor to buy back bonds as oil prices drop

ESTEBAN DU ARTE

Suncor Energy Inc. is pushing ahead with a bond buyback as oil prices near this year’s lows amid recession worries.

Calgary-based Suncor plans to buy up to $1.75 billion of securities from 10 series of outstanding notes in U.S. and Canadian dollars, the company said in a statement Monday. Cenovus Energy Inc., another large Canadian oil company, did a similar offer earlier this month.

Suncor is going ahead with the tender weeks after S&P Global Ratings downgraded the company for a second time in less than three years as the ratings firm tightens credit ratio thresholds for Canadian oil companies, citing their more-volatile operating performance than North American peers. The perbarrel price of Brent crude slipped below $85 on Monday, and West Texas Intermediate fell below $80.

Canadian “oilsands producers have benefited significantly from high crude prices and the decline in heavy-crude imports to the U.S. from Venezuela” said Jaimin Patel, a credit analyst at Bloomberg Intelligence. “I wouldn’t be surprised to see further debt reduction for these companies.”

Suncor’s bond tender will expire on Oct. 4. Canadian Imperial Bank of Commerce, JPMorgan Chase & Co., Royal Bank of Canada and Toronto-Dominion Bank are jointlead dealer managers for the offer.

BUSINESS

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2022-09-27T07:00:00.0000000Z

2022-09-27T07:00:00.0000000Z

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