September 20, 2016 / 2:52 PM / 10 months ago

BUZZ-Encana hits 5-wk low on stock offering; RBC calls offering positive

1 Min Read

** Canadian oil and gas producer's U.S.-listed shares drop as much as 6.9 pct to 5-week low of $9.18

** Encana's offering of 107 mln shares (about 12.6 pct of outstanding shares) prices at $9.35 apiece, a 5 pct discount to last sale

** Company expects gross proceeds of about $1 bln; to use about half to fund part of 2017 capex and rest to repay debt

** RBC calls the offering "a positive step", hikes PT to $11 from $10 and keeps rating at 'sector perform'

** RBC: "By reducing debt and boosting its denominator via higher production and cash flow, Encana's equity issue has a favorable double-barreled impact on its 2017 net debt-to-trailing cash flow ratio"

** ECA is top-traded stock on U.S. exchanges, with about 47.7 mln shares changing hands

** Encana's Toronto-listed stock down 5.7 pct, biggest drag on Canada's main stock index

** Up to Monday's close, U.S.-listed stock had risen about 94 pct YTD

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