Bullish investors are betting on a recovery in oil prices, and see lower-rated firms dependent on higher prices settling into a relatively healthy situation. But, Lisa Abramowicz writes Monday for Bloomberg that Goldman Sachs and others are showing a healthy degree of skepticism about the prospects of these companies.
Mike Swell, Goldman Sachs co-head of global fixed-income portfolio management said on Friday that the firm has moved from overweight in energy-related corporate bonds to neutral, toward an underweight stance. Credit traders are also demanding slightly more yield to own junk-rated oil and gas company bonds low-rated debt.
High-yield energy bonds were big winners last year, but don’t expect this year to see a repeat of that performance.