NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) releases a new report focusing on
Canadian Energy. As KBRA expands our energy sector coverage, we would be
remiss if we overlooked what is taking place in Canada.
In the KBRA Zooms in on Canadian Energy report, we highlight our credit
views on a sample portfolio of 60 Canadian energy producers and
discusses policy decisions by the sovereign and sub-sovereign
governments that have an impact on the sector. The report also provides
an overview of the dynamics underway in Canada’s oil sector in regard to
pricing, supply, and exports. On balance, KBRA leans toward being
constructive on the sector over the long term as infrastructure
shortfalls are more likely to be addressed. Our view on the sector
considers the improving performance of the model portfolio of Canadian
energy corporates over the last two years as well as the policy
environment, which may turn out to be the fulcrum that rebalances
Canada’s energy story toward a more positive direction. This commentary
builds on KBRA’s emphasis on bringing together viewpoints and expertise
from across the company, in this case Sovereigns and Corporates, in
order to maximize analytical depth.
The main takeaways include:
Recent trends in KBRA’s sample portfolio of 60 Canadian energy
companies reflect recovery in credit quality.
Widening oil price differentials in 2018 created a sense of urgency to
address structural problems.
Proactive policy developments—including actions by both the federal
government and the Province of Alberta—reflect the importance of
Canada’s energy sector, support growth, stabilized prices in the short
term and, over the long term, could help solve structural bottlenecks.
The introduction of new pipelines, additional rail capacity, and
expanded domestic refinery operations are required for Canada to
regain its position as a strong energy exporter.
To view the report, click here.
Related Publications: (available at www.kbra.com)
New Energy Bankruptcies: Déjà vu All Over Again?
Political Economy Is a Supporting Actor in Oil Sector Performance
Updated View of Energy Firm Creditworthiness: Fundamentally Weaker or
Case for Canadian Banks
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About KBRA and KBRA Europe
KBRA is a full-service credit rating agency registered with the U.S.
Securities and Exchange Commission as an NRSRO. In addition, KBRA is
designated as a designated rating organization by the Ontario Securities
Commission for issuers of asset-backed securities to file a short form
prospectus or shelf prospectus. KBRA is also recognized by the National
Association of Insurance Commissioners as a Credit Rating Provider and
is a certified Credit Rating Agency (CRA) by the European Securities and
Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is
registered with ESMA as a CRA.
Corinne Hill, CFA,
Senior Director, Corporates
Joan Feldbaum-Vidra, Managing Director, Sovereigns
Van Hesser, Senior Managing Director