Rising Energy Prices Fuel Oil & Gas Lending Surge; Chase, BankAmerica Take Top Spots In Industry, Says LPC
NEW YORK, Aug. 18 /PRNewswire/ -- While rising gasoline prices are causing consternation for U.S. consumers, they are helping to revive corporate lending to the oil & gas industry, according to Loan Pricing Corporation (LPC), which tracks and analyzes the global loan and high-yield bond markets.
Lending to U.S.-based oil and gas companies topped $16 billion during the second quarter of 1999, an 86% increase over a slower first quarter of the year, according to LPC.
Much of this increase is a direct result of the reduced supply of oil (brought about by unprecedented compliance among OPEC members regarding production cuts) and increased demand world-wide (prompted in part by the summer vacation/travel season and the recovering Asian economies). Companies are taking advantage of the situation.
``Many oil and gas concerns in the U.S. are now in a much better position to access the capital markets than they were only a few months ago,' said Meredith Coffey, a vice-president at LPC. ``As well, they are finding it easier to issue other types of debt, and some are increasing both their drilling and acquisitions budgets.'
Indeed, a substantial portion of the improved second-quarter loan volume is a result of the mergers and acquisitions upswing in the corporate financial markets world-wide. Enerquest Oil and Gas and CNG Production, for instance, each purchased assets from Pioneer Natural Resources during the second quarter, while Ocean Energy sold natural gas properties to Cross Timbers Oil.
France's TotalFina last month made a 28 billion pounds sterling (roughly $45 billion) bid for France's Elf, a deal that would create the world's fourth-largest oil company. Elf's response was indicative of today's M&A environment; it launched a 50 billion euro ($54 billion) counter offer. Elf last week approached the European banking market in an effort to raise 18 billion euros to support the bid. It received pledges from lenders totaling 41 billion euros, the most ever raised by a first-time borrower in Europe, according to LPC.
The leading lenders to U.S oil and gas concerns during the first half of the year were Chase Manhattan Bank and Bank of America, leading $14.8 billion and $13.8 billion of loans, respectively.
Loan Pricing Corporation's First-half 1999 Oil & Gas League Table
Rank Bank Agent-only Volume Market Share
1 Chase Manhattan $14,841,000,000 23%
2 BankAmerica 13,792,850,000 21
3 Citibank/SSB 7,025,000,000 11
4 BANK ONE 4,874,500,000 7
5 ABN AMRO 3,505,000,000 5
6 First Union 2,552,500,000 4
7 SunTrust 2,130,000,000 3
8 CIBC World Markets 2,068,400,000 3
9 National Westminster 2,000,000,000 3
10 BankBoston 1,835,000,000 3
Please note: This League Table tracks agent-only volume for loans to U.S.-based oil and gas companies.
Loan Pricing Corporation, based in New York, collects, analyzes and publishes loan data in databases and publications including DealScan, a database of nearly $5 trillion in C&I loans since 1985, LoanConnector (http://www.loanconnector.com), a real-time loan syndications and news service and Gold Sheets, the industry's leading weekly publication of loan news, data and analysis. LPC is a Reuters company. Info: (212-489-5455 or info@loanpricing.com)
SOURCE: Loan Pricing Corporation |
