DBRS Assigns Provisional Rating of A (low) to New Issues of Cenovus Energy Inc.

DBRS has today assigned a provisional rating of A (low) to Cenovus Energy Inc.’s (Cenovus) proposed issuance of Senior Notes under a Rule 144A private placement. The offering is expected to settle on September 18, 2009. A provisional rating of A (low) was assigned to Cenovus’s Senior Unsecured Debt following the September 10, 2009, announcement by EnCana Corporation (EnCana) that the latter’s Board of Directors had unanimously approved a proposal (the Transaction) to spin off its Integrated Oil and Canadian Plains divisions into a new entity, Cenovus (see DBRS press release dated September 10, 2009).

Finalization of the provisional rating of A (low) for the Senior Notes is subject to DBRS’s satisfactory review of final documentation and the Transaction proceeding on terms and conditions as currently contemplated and as outlined in DBRS’s press release dated September 10, 2009. The Senior Notes would rank equally with future unsecured and unsubordinated indebtedness, including Cenovus’s credit facilities. The net proceeds from the sale of the Senior Notes will be placed into an escrow account until the Transaction’s closing and then used to repay all or a portion of the indebtedness to be incurred by Cenovus to acquire assets from EnCana, with the remaining amount, if any, for general corporate purposes.

Notes:
All figures are in U.S. dollars unless otherwise noted.

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

This is a Corporate rating.