Fitch: Deep Panuke view to stable

Fitch Ratings said it affirmed the BBB- rating of SBM Deep Panuke SA's $450 million senior secured notes due 2021.

The outlook was revised to stable from negative following a corresponding Fitch rating action on offtaker Encana Corp. (BBB-, stable).

“Deep Panuke's rating reflects stable cash flow earned under a charter contract with fixed lease payments received from Encana, the rating of which actively constrains the project's rating,” Fitch said in a news release.

“The charter contains achievable performance requirements, a pass-through of all operational costs, and completely mitigates exposure to resource risk. Contractual risk transfer provisions allow for only nominal administrative cost exposure such that rating case debt service coverage ratios (DSCRs) of 1.26x are essentially unchanged from the base case. The debt structure is fully amortizing with a relatively short tenor of seven years.”

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