DJ Borrowing Costs for Oil Companies on the Rise as Demand Wanes -- Market Talk
0957 GMT - Oil companies are having to pay a higher interest to secure new funding from environmentally-conscious investors, says Aegon Asset Management. "ESG concerns are rapidly raising the cost of borrowing for oil companies as interest in hydro-carbon investment wanes and fund mandates become ever more restrictive," says Eleanor Price, senior credit analyst at AAM. She give the example of two recent deals. London-headquartered oil and gas exploration company Tullow Oil's $1.8 billion bond deal in April "was well received by the market due to its double-digit coupon and the concurrent simplification of its capital structure," she says. Israel's Delek-owned Ithaca's bond issued last month is trading a price below its issue level, despite pricing at a 9% coupon, she says. AAM has holdings in both companies. (lorena.ruibal@wsj.com)
(END) Dow Jones Newswires
August 25, 2021 05:57 ET (09:57 GMT)
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