Magazine article Global Finance

US Energy Deals Boost High-Yield Issuance

Magazine article Global Finance

US Energy Deals Boost High-Yield Issuance

Article excerpt

A scries of debt-refinancing issues in the energy sector, as well as borrowing to pay for a major acquisition in the natural-gas industry, have helped to fire up activity in the US highyield bond market. The volume of new issues rose 52%, to about $7 billion, in November from a month earlier, according to Montpclier, Vermont-based KDP Investment Advisors.

Global debt capital market volume, including sovereign issues, totaled $429 billion in November, down 15% from a year earlier, according to London-based I )ealogic. The Americas was the leading world region in November, accounting tor 47% of global volume, down 7 percentage points from a year earlier.

Among investment-bank advisers, Uarclays topped global debt-capital market volume rankings in November with an S.2% market share, Dealogic said, while JPMorgan topped the revenue rankings with a 7.1% share.

Oklahoma City-based Chesapeake Energy', [he second-largest independent producer ot natural gas in the United States, placed $500 million of senior notes due in 2020 with private investors in the US highyield market. The notes, which carry an interest rate of 6.H75%. were priced to yield 7% to maturity.

Chesapeake Energy also placed SnOO million of senior unsecured contingent convertible notes due in I 2035, as well as $500 million of cumulative preferred stock, to help pay for its acquisition of Charleston. West Virginiabased Columbia Natural Resources for $2.2 billion in cash and the assumption of $750 million in liabilities.

The acquisition would make Chesapeake the thirdlargest holder of natural-gas reserves in the United States, following ExxonMobil and ConocoPhillips. …

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