Cenovus raises $2.6bn in bonds and announces debt buyback

Cenovus Energy Inc. announced it has completed a public bond offering totalling $2.6bn, conducted simultaneously in Canadian and US markets. The transaction includes four tranches of senior unsecured notes with fixed interest rates and maturities ranging from 2031 to 2036. It was carried out under a short-form base shelf prospectus filed with regulatory authorities in Canada and the United States.

The offering comprises CAD650mn ($475mn) at 4.250% maturing in 2033, CAD550mn ($402mn) at 4.600% due in 2035, $500mn at 4.650% maturing in 2031, and $500mn at 5.400% due in 2036. All notes are senior unsecured debt, with no security provisions. The company stated that the proceeds would primarily be used to refinance existing liabilities.

Early redemption of fixed-rate notes

Cenovus Energy also announced it will proceed with the early redemption of several existing note series totalling over $1.7bn. This includes CAD750mn ($548mn) in 3.600% notes maturing in March 2027, $373mn in 4.250% notes maturing in April 2027, and $600mn in 5.875% notes issued by MEG Energy Corp. due in February 2029.

The buybacks will occur on their respective early redemption dates, with the US dollar-denominated notes due on December 1, 2025, and the Canadian dollar notes on December 22, 2025. Holders will receive a redemption price calculated in accordance with the applicable trust indentures.

Debt maturity profile optimisation

The transaction allows Cenovus to adjust its repayment schedule by replacing higher-rate, shorter-term liabilities with longer-dated instruments. The maturity profile is extended through 2036 amid relatively stable bond market rates in North America.

All notes targeted for redemption are callable at Cenovus’s discretion, with no mandatory early call clauses triggered by holders. Payment of principal and interest will cease as of the respective redemption dates. The company did not disclose expected interest savings or accounting impacts.