Bond Markets Losing Faith Even In Large Oil Companies

Monday, February 29, 2016
By Paul Martin

By Charles Kennedy
OilPrice.com
Mon, 29 February 2016

Energy bonds have become so beaten down that the yields on bonds from some investment grade energy companies are spiking above the yields on junk-rated U.S. debt, a very rare event that highlights the growing unease with which investors are viewing even the relatively strong oil producers.

In fact, the spiking bond yields on investment-grade energy debt show that even solid oil drillers “with the best of intentions can still just run out of room to move and run out of time. Things could get very bad,” Matthew Duch, a money manager at Calvert Investments Inc., told Bloomberg in an interview.

The magnitude of the crisis facing the oil and gas sector is illustrated by the fact that broader U.S. corporates with credit ratings in junk territory are seen as less risky than investment-grade oil and gas companies.

The Rest…HERE

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