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An oil sands operation in Alberta.
An oil sands operation in Alberta.

Tervita’s $290-million financing gets rough rating

In its first financing announcement since rumours of a pending initial public offering swirled this summer, Tervita Corp. is issuing $290-million (U.S.) of senior unsecured notes.

The kicker: they’re rated CCC+ by Standard & Poor’s.

In a report explaining its rating, S&P noted “high debt leverage due to management’s aggressive financial policy” as well as the firm’s “participation in the competitive and cyclical oilfield services market, and lack of long-term contracts.” As of June 30, Tervita’s senior secured debt was 4.5 time its earnings before interest, taxes, depreciation and amortization.