For oil companies $110 billion debt wall looms over next five years

NEW YORK (Bloomberg) -- The worst may be yet to come for some strained oil services companies as $110 billion in debt, most of it junk rated, creeps closer to maturity.

More than $21 billion of debt from oilfield services and drilling companies is estimated to be maturing in 2018, almost three times the total burden in 2017, according to a report from Moody’s Investors Service on Aug. 9. More than 70% of those high-yield bonds and term loans are rated Caa1 or lower, and more than 90% are rated below B1.

Speculative-grade debt is becoming increasingly risky, as the default rate is expected to reach 5.1% in November, according to a separate Moody’s report. The 12-month global default rate rose to 4.7% in July, up from its long-term average of 4.2%, Moody’s wrote. Of the 102 defaults this year, 49 have come from the oil and gas sector, Moody’s noted.

http://www.worldoil.com/news/2016/8/9/for-oil-companies-110-billion-debt-wall-looms-over-next-five-years