Over the past year, the level of bankruptcies in the energy sector for U.S. companies with speculative grade debt has reached a record level of 13%, according to Financial Times, citing analysts of rating Agency Fitch. A year ago the rate was 2%.
Fitch anticipates that this figure will reach to the end of the year the level of 20%. Analyst Sharon Bonelli stressed that the defaults are “very concentrated” in primary industries, as companies try to adjust to low prices.
In mid-April, senior credit analyst at JP Morgan Chase & Co Tarek Hamid predicted that with the continuation of oil prices at $35 per barrel from approximately 150 us energy companies with speculative grade debt bankruptcy before the end of the year expects 36% of them.
For the last three days in the US went bankrupt two companies, the FT notes. On Friday and Saturday a Declaration of insolvency was filed by Ultra Petroleum and Midstates Petroleum, and that has brought the industry default rate at record level. The aggregate debt of the companies was $5.8 billion, writes The Wall Street Journal.
The publication cited data from the consulting firm Gavin/Solmonese, according to which in the last year of the bankruptcy, said 67 of the American oil and gas companies, which is 380% compared to 2014.
According to the analyst company Invesco Scott Roberts, the end of the defaults are still not visible, as there are a number of companies, structure of capital, which can work at an oil price of $45, writes the FT.
On Monday, the JPMorgan economists said, as the newspaper reports that banks have tightened the conditions for issuing commercial and industrial loans subject to”, what, in their opinion, contributed to the deteriorating conditions in the energy sector”.
In early April, Standard & Poor’s announced that the number of corporate defaults reached their highest level in seven years. At that time, since the beginning of the year, according to the Agency, declared bankruptcy 40 companies, of which 34 were American, and 14 belonged to the oil and gas industry.