DBRS Changes Trend on SBM Deep Panuke’s Senior Secured Notes to Stable from Negative and Confirms the BB (high) Rating

DBRS Limited (DBRS) has today changed the trend on the 3.50% Senior Secured Notes due 2021 (the Notes) issued by SBM Deep Panuke S.A. (the Issuer) to Stable from Negative and confirms the rating of BB (high).

The trend change follows DBRS’s trend change of Encana Corporation’s (Encana) Issuer Rating to Stable from Negative on October 7, 2016. Encana is the lessee of the Deep Panuke Production Facility (the Platform) under a Charter Agreement that extends beyond the full amortization period of the Notes, which will be fully amortized by December 2021.

Under the Charter Agreement, Encana is responsible for paying a fixed lease rate to the Issuer for use of the Platform. If Encana elects to terminate the Charter Agreement, it must pay a Termination Fee, which, together with the proceeds of the debt service reserve account and other cash balances of the Issuer, would be sufficient to fully repay the Notes. The rating on the Notes is therefore strongly influenced by Encana’s ratings.

Notes:
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.

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

The applicable methodology is Rating Project Finance (June 2016), which can be found on our website under Methodologies.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.