Transocean’s less than stellar bond sale shows cool market for energy
Jul 9 2016, 08:25 ET | About:
Transocean Ltd. (RIG) | By:
Carl Surran, SA News Editor
Transocean (NYSE:
RIG) earlier this week was the first junk-rated company to jump into the bond market since the June 23 Brexit vote,
hoping to raise $1.5B, but it ended up
trimming the deal to $1.25B and had to boost yields to entice investors.
RIG’s difficulty would not seem to spell the end of demand for junk bonds, as mutual funds and ETFs that buy the riskier corporate debt saw inflows of $1.8B this week that snapped three weeks of outflows, but it could show that
investors remain apprehensive when it comes to energy companies, Bloomberg reports.
RIG sold $1.25B of 9% seven-year bonds at $0.975 on the dollar, a larger discount than the $0.98-$0.99 at which it initially offered the notes, according to the report - a cool reception that stands in contrast to the enthusiastic greeting for $1.5B of notes sold early last month (
I,
II,
III,
IV) by Weatherford (NYSE:
WFT).
Even if more companies are able to issue high-yield debt in the coming weeks, the window of opportunity for other energy issuers may be closed for now, says Bloomberg's Stephen Cutter.
Now read:
Implications Of Transocean's Recent Refinancing »
