DBRS Places the Ratings of Talisman Energy Inc. Under Review with Developing Implications

DBRS Limited (DBRS) has today placed the ratings of Talisman Energy Inc. (Talisman or the Company) Under Review with Developing Implications. The rating actions are underpinned by DBRS’s review of the credit implications of the Company’s announcement that it is to be acquired by Repsol S.A. (Repsol) in an all-cash transaction.

On December 16, 2014, Talisman announced that it has entered into a definitive agreement with Repsol under which Repsol will acquire all of the outstanding common shares of Talisman in cash for a total transaction value of approximately $13 billion, including Talisman’s existing debt. The transaction is expected to close in Q2 2015.

Overall, DBRS expects this transaction to have a minimal impact on Talisman’s ratings. From a business risk perspective, the acquisition would be a net positive for Talisman given Repsol’s significant size and scale of integrated and geographically well-diversified operations. From a financial risk perspective, the pro forma financial metrics are expected to be reasonable to support an investment-grade rating.

DBRS will continue to monitor the developments that could potentially result in a negative rating action if there are any material deviations from DBRS’s expectations post-closing of the transaction.

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

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

The applicable methodologies are Rating Companies in the Oil and Gas Industry (October 2014) and DBRS Criteria: Rating Preferred Share and Hybrid Criteria for Corporate Issuers (December 2014), which can be found on our website under Methodologies.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.