Default warning as US energy sector’s financial woes persist

FINANCIAL TIMES 🔒 | Defaults by US oil and gas producers are set to outstrip all other sectors again in 2021 as an industry battered by this year’s price crash faces yet more pain, according to a forecast from a rating agency.

Energy will account for $15bn-$18bn of US high-yield bond defaults in 2021, Fitch predicted. That is more than double both healthcare and industrials, the next most affected sectors, the rating agency said.

The volume will be well below the $48bn racked up by energy companies in the past year, which at 41 per cent of the total was also by far the largest of any sector. But the persistence of elevated distress levels will dash hopes of a respite for the industry after one of its toughest years in recent history.

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