The left wants to kill shale, and with some help from the Saudis, they will

Message:

As oil prices sink lower and lower, the distress in the oil patch grows larger and larger.

It's just a matter of time when the only industry that is actually growing in this economy --- will go bust.

Published on Zero Hedge (http://www.zerohedge.com)

Home > How Bad Is It For Shale Companies: The Cost Of Resolute Energy's New Second-Lien Debt: 25%!

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How Bad Is It For Shale Companies: The Cost Of Resolute Energy's New Second-Lien Debt: 25%!

By Tyler Durden

Created 01/08/2015 - 17:10

Over the weekend, we saw the first casualty of low oil prices as WBH Energy went into bankruptcy [1]. Today, Bloomberg reports,Resolute Energy Corp. has been forced by low oil prices to borrow at distressed levels. The Denver-based company, which we previously highlighted as having a 4.5x Debt/EBITDA (there are a lot higher), managed to procure a new $150 million 2nd term loan from Highbridge Capital (mostly used to roll old debt). The cost of funding: 11% coupon plus 5% upfront (and a guaranteed 25% return for the lender if Resolute pays it back early). At that cost of funding, it is no wonder that Resolute's bonds remain, to borrow a Charlie Evans phrase, catastrophically priced.

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Source URL: http://www.zerohedge.com/news/2015-01-08/how-bad-it-shale-companies-cost-resolute-energys-new-second-lien-debt-25

Links:
[1] http://www.zerohedge.com/news/2015-01-07/first-shale-casualty-wbh-energy-files-bankruptcy-many-more-coming