(Photo: An aerial view of Syncrude’s Mildred Lake Plant where Canadian Oil Sands Ltd. owns a 36.74 per cent stake.)
Moody’s Investors Service slashed the credit rating of Canadian Oil Sands Ltd. from Baa2 to Baa3, which is Moody’s lowest level of investment-grade credit just above the junk grade.
“The downgrade and negative outlook reflects our expectation of elevated leverage metrics through 2016,” said Terry Marshall, Senior Vice President in a press release.
It warns that the level could be further downgraded to Ba1 if oil prices remain below $60 U.S per barrel.
“Moody’s expects negative free cash flow of about $125 million from June 30, 2015, to September 30, 2016 to be largely debt funed,” it said.
Canadian Oil Sands Ltd. reported a net loss of $128 million in the second quarter amid tumbling oil prices.
The company holds a 36.74 per cent interest in Syncrude.
MyMcMurray has requested a comment from Canadian Oil Sands Ltd.
