DBRS Maintains Suncor Energy’s Ratings Under Review - Developing, Discontinues PC Ratings

DBRS has today maintained the Under Review with Developing Implications status for the Commercial Paper (CP) and Debentures and Medium-Term Notes ratings of Suncor Energy Inc. (Suncor or the Company), the successor entity which has retained the Suncor name after the merger (the Merger) between Suncor and Petro-Canada (PC). The Under Review status was placed on March 23, 2009 (see separate press release), pursuant to the announced proposed Merger through a share exchange, which has subsequently closed today. The Under Review status is also maintained on the Senior Notes of PC Financial Partnership as it remains a separate legal entity after the Merger, and the Senior Notes are guaranteed by Suncor. The CP and Unsecured Notes & Debentures ratings of PC have been discontinued as PC has merged with Suncor as per the plan of arrangement and all PC obligations have been assumed by Suncor.

While the transaction has closed, DBRS expects to conclude its rating review within the next four to six weeks, following a comprehensive review of the Company with management. As indicated in DBRS’s press release of March 23, 2009, while the Merger has positive implications from a strategic, operating and financial standpoint with potential cost synergies, increased diversification and vast resources for future development, there are uncertainties and associated integration risks. DBRS’s review will focus on management’s approach, regarding the potential use of balance sheet leverage to fund substantial growth projects previously planned, which could somewhat offset the merger benefits and have rating implications for the successor entity. Included in DBRS’s review are: (1) financial and operational focus, including the successor entity’s capital structure, financing policies/prioritization (especially for growth projects), credit metric targets, capital spending profiles and plans to contain/reduce operating cost for oil sands, (2) liquidity arrangements commensurate with capital growth requirements, and (3) hedging policies and arrangements to mitigate price volatility and to secure cash flows.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The applicable methodology is Rating Oil & Gas Companies, which can be found on our website under Methodologies.

Suncor Energy Inc. is guaranteed by Suncor Energy Oil Sands Limited Partnership.

PC Financial Partnership is guaranteed by Suncor Energy Inc. and Suncor Energy Oil Sands Limited Partnership.

This is a Corporate rating.