Energy Sector Seizes Selling Window --- Bond Issuers Look to Gather Capital as Market Improves; S&P Sees Lingering Risks
NEW YORK -- Energy companies have been among the most aggressive at taking advantage of a reopening of the corporate-bond market recently.</br></br>Since the beginning of last week, seven energy-related companies have sold bonds.</br></br>Those issuers were looking to fund continuing capital programs at a point when improving market sentiment had opened the borrowing window. They present a stark contrast to energy companies such as Dynegy Inc. and Williams Cos., which have been selling assets in a bid to stave off further deterioration of credit ratings.</br></br>Yet a report Wednesday by Standard & Poor's analyst Suzanne Smith cautioned that "it is not only struggling companies that command attention. S&P's current focus is on liquidity for all companies in the power and energy industry."</br></br>S&P said the energy sector is under a "cloud" of some $30 billion in shorter-term loans used to finance initial power-plant construction that will need to be refinanced within the next 18 to 24 months. It added that "the power and energy industry faces an unprecedented confluence of operational and financial challenges, making ample liquidity a much more important component of credit analysis."