"Sunshine is a Calgary based public corporation, listed on the Hong Kong Stock Exchange since March 1, 2012 and the Toronto Stock Exchange since November 16, 2012. The Company is focused on the development of its significant holdings of oil sands leases in the Athabasca oil sands region. Sunshine owns interests in approximately one million acres of oil sands and P&NG leases in the Athabasca region. The Company is currently focused on executing milestone undertakings in the West Ells project area. West Ells has an initial production target rate of 5,000 barrels per day". From the LinkedIn Profile.
BDC Credit Reporter View
Sunshine Oilsands is a Hong Kong public company with tar oil reserves in Canada which are being converted into producing oil wells. The Company has faced difficulties because of the oil price drop and a need for capital to develop its reserves sufficiently to generate oil production. In August 2014 the Company issued $200mn of Senior Secured Notes, along with raising equity capital. The only BDC with exposure to the Company is PennantPark Floating Rate or PFLT, with $2.8mn at Cost. At September 30, 2016 PFLT valued the Notes at a discount of 42% to cost. That followed a Forbearance Agreement agreed on September 12, 2016 which restructured the debt and the payments to the Note Holders. However on October 31st 2016, the Company reneged on paying a scheduled and overdue "yield maintenance premium" that had been agreed to just 2 weeks earlier while waiting on an update about a new equity infusion. Last wwe heard that constituted a default but no action had yet been taken. As a result the BDC Credit Reporter has a Corporate Credit Rating of 5-implying we are almost certain a company will not meet some of its financial obligations-a status of Non Performing (viz. the "yield maintenance premium") and the Credit Trend is Down. Regarding the latter, we note that as of late November the Notes were trading at a 45% discount to par. A greater write-down is possible on the Notes or even a full write-off (these are Second Lien) if new capital is not raised, or a mark-up if capital is sourced.