Husky Energy Inc. cumulative redeemable preferred T.HSE.PR.B

Chances of bankruptcy

[believer123]

Is it possible for Husky to go bankrupt at $these oil prices?

When oil was above $50 the earnings weren't that spectacular to begin with. Q4 they barely made an adjusted earnings of 5 million if im not mistaken.

[firstworld]

They will buy some one soon. This is what they've been waiting for....strong attack when weak are cowering! Need a few months but there wi be lots of govt bailouts now with extend and pretend. Canadians always getting bailed out never learn to compete just welfare cases LOL.

[oilandgasmick]

It's possible but I would say unlikely. They are sitting on 1.8 Billion in cash and as many have said, they can cancel the dividend if this situation persists for another quarter. They also have a 3B credit line that they can utilize if need be and I still believe that they can cut capex some more. I would say get down to sustaining capitall only--forget expansion and new production for now

[autofocus111]

oil&gas RE: growth capex They can delay some of their western expansion, but I doubt they can do much about their offshore project commitments, or that they would even want to at this juncture. RE: debt maturities those look pretty spread out I think they are okay on that front unless the extreme price depression drags on for more than a year (I very much doubt that will be the case as US

[onec007]

The company currently has $950 mil in short term debt due within one year. They could always refinance and push these dates out. Few points to consider: 1. Total of $3.9 billion in unused capital that they can borrow ($436 for short term and $3.45 billion for long term) 2. Sale of their retail business is still in place - possibility I think has greatly been reduced. However, these assets are

[wheeloffortune]

The five-year bond rate today is now 0.63%, so they'll be able to refinance that debt for a lot less than they're paying now. 

[oilandgasmick]

Yes, with interest rates at historic lows it makes great sense to refinance at lower rates. If interest rates were 10% then the threat of bankruptcy would loom larger but with the long term treasury yields at less than 1% it takes a lot of the heat off borrowers.

[RagingBull3]

Can you give more info on that $950 mil in short term debt. I think there's 500M Notes due April 15, 2022. Not sure what interest rate is being paid on those notes. What else due, when and at what rate? I think there's $750M due in March 2025 and $750M due in March 2027

[autofocus111]

@RB Notes15/16 on pages 38/39 of the Q4/19 earnings report gives the detailed breakdown of debt. https://huskyenergy.com/downloads/investorrelations/2019/HSE_FS_4Q19.pdf

[oilandgasmick]

Thanks Auto: Looks like 400M due this year and then another big chunk in 2022 but should be manageable. Those rates of around 4% could be refinanced at lower rates with credit line?

[believer123]

If the last price bomb is any indication, we will be sub 50 until 2023 - it took 3 years just to get to $50 bucks from $26 3 years is too long for canadian oil to last, let alone husky

[wheeloffortune]

Nonsense and conjecture.  Sub $50 for another three years would cause the Saudi and Russian economies to collapse.  BTW Husky also has refineries and gas stations which will still make money as well as $1.8B in cash.

[mrbb]

conspiracy or not, i view this black swan covid-19 was created to kill the stock market which is what trump popularity momentum riding on AND to slow down china . I'm not sure if trump gonna bailout the shale oil but i know once the > 50% of shale oilers are snuffed out.  Opec and russia will stop this price war and jack up oil price.   The big oilsand producers with good balance

[BounceZB]

This post has been removed in accordance with Community Policy

[wheeloffortune]

Yes, p.39 "Interest payable is based on Bankers’ Acceptance, CAD Prime Rate, U.S. LIBOR, or U.S. Base Rates, depending on the borrowing option selected and credit ratings assigned by certain credit rating agencies to the Company."  Note "CAD Prime Rate."  That's the 5 year bond rate.  Then creditors add a couple hundred points above the bond rate as their

[oilandgasmick]

Yes, looks like interest rates are headed for less than 1% (actually negative rates if you consider inflation) so as some have suggested here, refinance at lower rates and push the maturity dates down the road to a date when you know a lot of other energy companies won't be in business any more-- then it makes great strategic sense. And of course, (to the enjoyment of a few tweeners around

[RagingBull3]

Thanks Auto

[firstworld]

420 MN is loose change for HSE.  They are now in the position to cut 30% of people and ask the rest to work 14 hrs a day 6 days a week like the other 5 BN people on the planet doing the same.

[mrbb]

if hse slash cap. spending, cutting staff would not increase work load for remaining staff. In fact, hse had done a large staff cut in 2019 in anticipation of reduced cap spending and liberal winning again.  I see reduce hours of work instead of increasing work load for remaining staff.  CNRL is stuck with all the devon staff which they acquired in 2019.   Devon is the last US major