Domestic shale exploration and production is dependent on junk-rated borrowing
Thursday, May 22, 2014
by Matt Warnock
Bloomberg recent published a feature article detailing how the domestic energy boom is "backed by a surge in junk-rated borrowing" that has become vital to the shale industry's success. Despite the fact that Standard & Poor's assigned a CCC+ rating to Pennsylvania-based Rice Energy Inc.'s first bond issue after going public in January, the company was still "able to borrow at 6.25 percent" (See our May 3, 2014, blog post for more information). While the high-yield debt market "has doubled in size since the end of 2004, the amount issued by exploration and production companies has grown nine-fold," the article said. For more, read the full story.