Credit market jitters have done little to deter yield-hungry investors from buying new junk bonds to get their fix.
Consider PDC Energy Inc., an oil explorer with credit ratings four levels below investment grade. Investors were so enthusiastic about the company’s bond sale on Monday that they put in $1.5 billion of orders for a $400 million offering, according to people with knowledge of the matter.
PDC’s hardly alone. Despite Tuesday’s plunge in crude, Callon Petroleum Co. and Great Western Petroleum are planning to raise a combined $650 million of debt this week, said the people, who asked not to be identified because the deals are private. They’re seeking to take advantage of borrowing costs that are hovering near 15-month lows even after the busiest August for sales since 2012.
This post was published at David Stockmans Contra Corner by Claire Boston, Bloomberg Business ‘ September 14, 2016.
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