This data book provides a reference guide to the listed and leveraged oil & gas fixed income securities, and their performance.
While the recent quarterly decline in issuance has been abated, of sorts, it does not feel as if there is any meaningful support on the upside, and as a consequence, it remains too early to say whether it will be sustained.
This month is encapsulated by the following key takeaways:
- January 2021 remains the stand-out month for leveraged debt issuance.
- With 2 months to the end of the year, 2021 will be weaker than 2020, but it is not clear whether the growth will return, or if it is a reversion to mean (2016 - 2019).
- Margins have started to tick up, which is contrary to the underlying commodity risk, which has declined with stronger prices.
- The small uptick in September (versus August) continues to support the hope of return to growth, which although has been carried through to October (traditionally a strong month), the feeling is, in some circles, that the increase to October should have been greater to have indicate a more sustainable recovery.
- Ratings distribution remains steady Q-o-Q, as the oil price rise has offset the impending raft of downgrades that were in the offing last quarter. 3Q should see start to see the impact of the higher oil price environment feeding though.
- Yields continue to demonstrate the split between the “hunt for returns” and “risk off,” with the “Investment Grade” line apparently being drawn at Moody’s “B” rating. However, in a rising energy market, this indicates a more complex underlying story is underway, most likely due to growing influence of ESG metrics.
- Against that backdrop and an ever larger refinancing mountain to work though, there will be lots of headwinds for oil & gas
In this edition, we provide the front section of the report (PDF format), while the individual debt data can be accessed from the data file (Excel).