DBRS Assigns Pfd-2 (low) Rating to Husky Energy Inc.’s Preferred Share Issue

DBRS has today assigned a rating of Pfd-2 (low) with a Stable trend to Husky Energy Inc.’s (Husky) Cumulative Redeemable Rate Reset Preferred Shares, Series 1 (Series 1 Preferred Shares), with a dividend rate of 4.45% per annum, payable quarterly for the initial five-year period ending March 31, 2016. The dividend rate will reset on March 31, 2016, and every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield plus 1.73%. The Series 1 Preferred Shares are redeemable by Husky on March 31, 2016, and on March 31 every five years thereafter. The Series 1 Preferred Shares will be issued for aggregate gross proceeds of $250 million. Husky has granted the underwriters an option that could result in an additional $50 million of aggregate gross proceeds.

The Series 1 Preferred Shares are being issued under the Prospectus Supplement to be dated March 11, 2011, to the Short Form Base Shelf Prospectus dated November 26, 2010, and are expected to settle on March 18, 2011. The DBRS rating is based on the expectation that the Series 1 Preferred Shares will remain the most highly ranked preferred shares issued by Husky. Net proceeds from the offering will be used for repayment of existing indebtedness, capital expenditures, corporate and asset acquisitions and for general corporate purposes.

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

The applicable methodology is Rating North American Energy Utilities (Electric, Natural Gas and Pipelines), which can be found on our website under Methodologies.