S&P affirms Osum Production

S&P said it affirmed its CCC+ long-term issuer credit rating on Osum Production Corp. and parent company Osum Oil Sands Corp.

The outlook is stable.

At the same time, S&P affirmed its B issue-level rating on the company's senior secured term loan. The 1 recovery rating on the debt is unchanged, indicating an expectation of very high (90%-100%; rounded estimate 95%) recovery in a default scenario.

“The ratings on OPC reflect the company's relatively small production base and development footprint, its high geographic and product concentration and our expectation that credit metrics will remain pressured during the next 12 months,” the agency said in a news release.

“We expect funds from operations (FFO)-to-debt will remain close to the lower end of the 0%-12% range in the following 12 months, which we believe represents characteristics of an unsustainable capital structure.”

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