|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's range||4.84 - 4.84|
|52-week range||4.72 - 8.55|
|Beta (5Y monthly)||N/A|
|PE ratio (TTM)||N/A|
|Forward dividend & yield||N/A (N/A)|
|1y target est||N/A|
(Bloomberg) -- Companies around the globe, concerned that heightened tensions between the U.S. and Iran could roil bond markets, are rushing to borrow cheaply while they still can.Investment-grade firms have sold more than $61 billion of notes in the U.S. through Thursday, double the same period in 2019. In Europe, investment-rated and junk bond sales including company and country debt broke a 79 billion-euro ($88 billion) weekly record set a year ago. Borrowers from around the Asia Pacific region sold more than $28 billion in dollar notes this week, in a record start.Companies have reasoned that it makes sense to sell bonds now when conditions are still good and demand is strong. If the Iran situation were to worsen and sentiment turn, then borrowers “may end up paying more and demand for riskier assets will wane,” said Alex Eventon, a fund manager at Resco Asset Management.“No matter what comes next conditions are likely to be less good than they are now,” Eventon said.The high volume of U.S. investment-grade bond sales this week could translate to slower activity later in January, which is typically one of the busiest months of the year for borrowing. Wall Street strategists broadly expect blue-chip companies to sell around 5% fewer dollar-denominated bonds this year than last year on a gross basis, as they cut their overall debt levels and take advantage of comparatively lower yields in Europe. And in the near term, many companies are close to posting quarterly results, which limits how much debt they can sell for now anyway.Some of the major issuers this week in the U.S. included American Tower Corp., a company that leases out space on cellphone towers, which sold $1.5 billion of notes in two parts. Among issuers from APAC, Westpac Banking Corp. and Nomura Holdings Inc. led a handful of multi-billion dollar deals, with a large swathe of Chinese companies also selling. In Europe, a flood of bank deals materialized, including a 1.25 billion-euro sale from Italy’s UniCredit SpA.“Investor demand has been at, or close to, record levels in many instances,” said Lee Cumbes, a managing director in debt capital markets at Barclays Plc in London.Strong DemandThat demand is evident globally. In the U.S., money managers this week put in orders for far more bonds than companies were selling, and yields on new notes are almost equal to companies’ existing debt, instead of being higher.Demand is so strong that even companies with some of the lowest credit ratings, which might have struggled to borrow for much of last year, have been able to tap the market. Transocean Ltd., an offshore oil driller, sold $750 million of junk bonds on Wednesday. The notes carry a Caa1 rating from Moody’s Investors Service, putting them in the lowest tier of debt that companies typically issue. S&P Global Ratings has the securities the equivalent of one step higher at B-.The reason for the strong issuance levels globally is clear, money managers said.“As long as the market is open and investors are ready to buy, there’s always the potential for more uncertainty out there if you decide to hold off,” said Bob Summers, an investment-grade portfolio manager at Neuberger Berman in Chicago. “If a company has all its documentation lined up and ready to go, there’s really no reason to wait.”Escalation, De-escalationTension between Iran and the U.S. intensified last week after the U.S. killed Qassem Soleimani, a top Iranian general. U.S. President Donald Trump tweeted that Soleimani was planning to kill Americans. Iran vowed revenge, and fired missiles at two U.S. bases in Iraq on Wednesday. The attacks caused no casualties, and Trump on Wednesday appeared to shift away from talk of war. It’s unclear if Iran is done with reprisals, but investors are less worried about the conflict, and U.S. stocks are reaching fresh records.The U.S. investment-grade market is coming off a year with gains of 14.5%, according to Bloomberg Barclays index data, and only six weeks of retail outflows for all of 2019, according to Refinitiv Lipper. Yields are just 2.86% on average, hovering near lows last seen in mid-2016. Risk premiums are near the tightest levels in almost two years.New notes have traded well in the secondary market so far, a sign that investors still have money to put to work, building on last year’s momentum, according to Stacey Starner McAllister, head of investment-grade fixed-income research at Eaton Vance Corp.“Maybe investors are less concerned about Iran and geopolitical factors than issuers are,” she said. “We’re always talking about those potential risks, but right now it’s not changing our base-case outlook for credit for the year.”(Updates issuance number in second graph, adds details.)\--With assistance from Rizal Tupaz, Priscila Azevedo Rocha, Tasos Vossos and Finbarr Flynn.To contact the reporters on this story: Molly Smith in New York at email@example.com;Michael Gambale in New York at firstname.lastname@example.org;Hannah Benjamin in London at email@example.comTo contact the editors responsible for this story: Nikolaj Gammeltoft at firstname.lastname@example.org, Dan WilchinsFor more articles like this, please visit us at bloomberg.com©2020 Bloomberg L.P.
Transocean Ltd. (NYSE:RIG) shareholders will doubtless be very grateful to see the share price up 54% in the last...
(Bloomberg Opinion) -- Royal Dutch Shell Plc made a big investment in offshore energy this week — wind energy, that is. The very next day, Brazil announced the results of a more traditional energy auction in the waters off its coast. They were not good.The country’s biggest-ever sale of oil deposits flopped on Wednesday morning. Only two out of four blocks were sold, and only one of those involved foreign bidders, with China’s CNOOC Ltd. and China National Oil and Gas Exploration and Development Co. taking all of 10% of the Buzios field. Petroleo Brasileiro SA took the other 90% and all of the Itapu block. Western oil majors, such as Shell or Exxon Mobil Corp., were nowhere to be seen.Offshore oil investment was all the rage among Big Oil during the supercycle, with capital expenditure almost quadrupling in the decade up to 2014. That is the problem. The majors poured money into large, multi-year projects prone to delays and, because of their often bespoke engineering, spiraling budgets. The result: tumbling return on capital and an inability to dial back investment quickly when the oil crash hit in 2014. Roughly 3,000 new offshore projects sanctioned between 2010 and 2014 have either barely generated any value for oil companies or are expected to generate none at all, according to a recent study published by Rystad Energy, a consultancy:More recent investments score better, mostly because the boom tailed off, with offshore capex falling by more than half between 2014 and 2018. That took the heat out of industry inflation; and, because of the bonfire of returns in the prior decade, oil majors got smarter about such things as standardizing offshore equipment design to cut costs and shorten schedules. The pace of new projects has picked up again after the slump. Exxon, for example, has effectively opened up an entire new offshore zone with its Guyanese fields.Still, one look at the stock prices of oilfield services firms, especially offshore-focused types such as Transocean Ltd. and Noble Corp. Plc, tells you this investment wave is nothing like the tsunami of yesteryear. Bad memories combined with unease about both near- and long-term oil demand make bold bets on big, multi-year offshore projects a tough sell with investors more interested in payouts. Even Exxon’s success in Guyana gets overshadowed by the fact that the company’s capex bill leaves it borrowing to pay its dividend. And Exxon, like Chevron Corp. and other majors, has swung more of its spending toward shorter-cycle onshore fracking in North America.Brazil’s brush-off is an ominous sign the investment discipline demanded by energy investors is choking off one of the world’s biggest sources of oil-supply growth. In its latest World Oil Outlook published this week, OPEC cited Brazil as being second only to the U.S. in terms of medium-term growth, and number one in terms of projected long-term non-OPEC growth. Bob Brackett, an analyst at Sanford C. Bernstein, published a report a couple of weeks ago pondering if global offshore oil supply would peak next year, perhaps for good.The implications are profound. There is a wide range of views on when global oil demand will slow or peak altogether. If it is later than sometime next decade, then the decline in offshore production that will inevitably follow a mass exodus from this part of the business could stoke another upcycle in prices. The Brazil auction suggests, however, that such possibilities play second fiddle to expectations on the part of many investors that oil has entered its twilight years.Such results are ominous for offshore services providers, of course, and for the countries involved. Brazil’s currency slumped Wednesday morning as the market digested the lack of foreign capital targeting the country’s choicest oil resources.Another country that should take note is Saudi Arabia. Like Brazil, it’s trying to tempt foreign buyers to pay up for a piece of its black gold. On the same morning, reports emerged that Saudi Arabian Oil Co. is seeking commitments from Chinese state-owned entities to invest in its IPO. Such strategic buyers do provide cash. But as Brazil could tell Aramco, turning to them also says a lot about the broader appetite for what you’re selling.To contact the author of this story: Liam Denning at email@example.comTo contact the editor responsible for this story: Mark Gongloff at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Liam Denning is a Bloomberg Opinion columnist covering energy, mining and commodities. He previously was editor of the Wall Street Journal's Heard on the Street column and wrote for the Financial Times' Lex column. He was also an investment banker.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The big shareholder groups in Transocean Ltd. (NYSE:RIG) have power over the company. Large companies usually have...
Eni (E) reported comprehensive earnings miss, TC Energy's (TRP) bottom line matched the Zacks Consensus Estimate, while Pioneer Natural Resources (PXD) outperformed our profit projection.
The Steinhausen, Switzerland-based company said it had a loss of 28 cents per share. Losses, adjusted for one-time gains and costs, were 30 cents per share. The results fell short of Wall Street expectations. ...
A three-judge panel found the lower court miscalculated damages because it used a standby rate to determine what Eni would have paid Transocean to complete the contract. It sent the damages decision back to the District Court to recalculate damages based on what work the rig could have performed. Transocean declined to comment on the ruling.
Offshore oil drilling stocks are set to rise with a projected rebound in deepwater drilling after its deepest downturn in 30 years as investment capital rushed to land-based shale drilling, analysts said in a Barron's article. Evercore ISI analyst James West favors Transocean Ltd , Ensco PLC, Rowan Cos PLC and Diamond Offshore Drilling Inc, he told Barron's. Last month, shareholders at Ensco and Rowan agreed to merge. West called Transocean "the best-managed company in the group" and told Barron's the company "has plenty of room for improvement" after its December purchase of Ocean Rig UDW, which operated semi-submersible oil platforms and underwater drillships.
The company's fourth-quarter earnings were unremarkable, but management continues to get ready for the long-awaited recovery of offshore drilling.