Debt and equity raises rebound following the end of 2014
Publicly-listed Canadian oil and gas companies raised $10.5 billion in debt and equity raises in the first half of 2015, nearly in-line with the previous year before oil prices tumbled, reports The Financial Post. The money raised by Canadian companies represented a 28% increase from the second half of 2014 following the decline in oil prices.
While many Canadian oil majors decided to cut capital expenditures like their North American and international peers, the companies’ ability to raise funds in the first half of the year suggest that commodity prices have not prevented access from capital markets.
However, according to information from CanOils, even though the total dollar value of the deals done in the first half of the year were largely in line with the $11.4 billion raised in the first half of 2014, the number of deals declined to 108, 33% lower than the year before.
TSX-listed companies raised $10 billion during the first half of 2015, with as much as $7 billion raised in equity and the other $3 billion in debt. In the first half of 2014, the equity-to-debt split was nearly even at $5 billion each, according to CanOils.
The largest equity raise recorded by a TSX-listed company in the first half of the year came from Cenovus Energy (ticker: CVE), which raised $1.50 billion. The net proceeds were used to partially fund the company’s $1.8 to $2.0 billion capital expenditure program for the year.
Husky Energy (ticker: HSE) completed the largest debt issuance in the first half of this year, raising $750 million through the issuance of non-convertible notes with a coupon rate of 3.55% per annum, due in 2025.
