Moody's affirms Suncor

Moody's Investors Service said it affirmed Suncor Energy Inc.'s Baa2 senior unsecured ratings.

The agency also said it assigned a P-2 commercial-paper rating to its proposed $2.5 billion commercial-paper program.

The outlook is stable.

The ratings reflect the company's significant production platform, large and long-lived oil sands reserves and its diversified cash flow stream from oil sands, conventional production and downstream businesses, Moody's said.

The ratings also consider Suncor's significant conventional reserves and production offshore in Eastern Canada and in the North Sea that generate strong margins and provide free cash flow to fund oil sands expansions, the agency said.

The rating is negatively impacted by Suncor's high leverage on production, significant anticipated growth in capital expenditures and the high fixed costs of its oil sands operation, Moody's said.

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