The Securities Litigation Expert Blog

Litigation Alert: Now Batting - Shale Bonds

Posted by Jack Duval

Mar 19, 2015 7:44:00 AM

The collapse in oil prices has been felt throughout the oil and gas industry, but nowhere as much as the in the high cost shale producers.

Goldman Sachs has produced a matrix of shale players according to their balance sheet and asset quality (HT ZeroHedge):

ScreenShot2015-03-19at7.47.13AM

I've charted the bond prices of the Group Four companies (Low Quality Assets/Weak Balance Sheets):

(For a high res image, download this.)

ShaleBondPrices

The bonds of these highly leveraged shale players have performed in line with their speculative characteristics.  There is no recovery in sight because the only hope they have of making their bond payments is by producing more oil, which will continue to depress prices, which will make these firms less profitable, and less able to make their bond payments...

The gears have reversed and barring some geopolicital event, are unlikely to reverse again before many of these players exit the corporate gene pool.

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For information about securities expert Jack Duval, click here.

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Topics: shale oil, bonds, securities litigation, fixed income, Securities Expert

High Yield Debt Stats Flashing Sell Signal

Posted by Jack Duval

Nov 14, 2012 3:11:11 AM

New issue high yield bond issuance is a record highs, while non-investment grade yields are at record lows, Soberlook reports.  (Soberlook) This can only end badly.

 

 

 

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Topics: bubble, Soberlook, investments, bonds, high yield

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