DBRS assigns B (low) to Southern Pacific Resource

DBRS said it assigned a provisional issuer rating of B (low) with a stable trend to Southern Pacific Resource Corp. and a provisional rating of B (low) with a stable trend and a provisional recovery rating of RR4 to the company's proposed senior secured second-lien notes.

DBRS said key challenges facing the company include the following: (1) weak financial and liquidity profiles; (2) a limited proven track record; (3) high up-front capital spending commitments and cost overrun risk associated with oil sands project expansion; (4) reliance on a single project; and (5) limited access to pipeline capacity.

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