Wednesday, July 3, 2013

Here is why, in the middle of floods and fire, the corporate media cannot say the words #climatechange

Bonds | Carbon Tracker Initiative:

  • "Adjusting the price and demand assumptions to reflect lower emissions levels results in risk of downgrades for pure oilsands operators.
  • This scenario puts pressure on cashflows which may result in dividends being cut or projects being cancelled.
  • But more fundamentally it questions the business model going forward of investing more capital in tarsands.
  • The three oilsands operators analysed have issued US$13.6 billion of corporate bonds, with over 50% of these maturing post-2020. The companies may find a very different context to try and refinance any of the debt which matures in the next few years. The uncertainty around the bonds which mature out to 2042 is not reflected in the current short outlook of a 3-5 year credit rating outlook.
  • This research shows that credit ratings need to start looking at alternative futures, as a carbon constrained world will not see past performance of this sector be repeated."

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