Bond loans in Norwegian offshore trading at junk prices

Bond debt in the offshore sector is now trading at prices 60 percent below original signing rates, due to sliding income among oil companies and a growing risk that they will be unable to pay, reports media Sysla.

Seadrill | Photo: Seadrill

Debt totaling around USD 103 billion is currently trading at prices close to 60 percent below the bond loans' original signing rates, estimates Nordic Bond Pricing according to Norwegian media Sysla, noting that the USD 103 billion in debt can currently be acquired for around USD 59 billion.

The low prices are primarily attributed to the growing risks related to the debt of companies struggling with sliding income following the low oil price. This development triggers a significant reduction in the probability of loans being repaid, and this is worrying, explains chief analyst Pål Ringholm of Swedbank. He adds that in today's market a price estimate of 58 percent is a sign of danger.

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