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One of the largest US energy exporters was able to borrow Tuesday through the US junk debt market. This is the first transaction since Donald Trump’s tariff war frozen the 1.4 tonne high-yield bond market.
A subsidiary of Venture Global, a liquefied natural gas producer, raised $2.5 billion in sales. This was closely monitored on Wall Street as a test of investors’ desire for high-risk corporate debt.
This is the first high-yield bond transaction since Trump announced his “liberation day” tariffs on April 2nd, causing chaos in the global market. Debt sales increased from the initial $1.5 billion offer as bankers restocked the orders of some investors in their eight- and ten-year maturity debt.
Venture Global’s debt hike will take place approximately four months after the group was made public in January. That stock has fallen by about 65% since its initial offer.
While debt transactions have been successful for LNG exporters, bankers and investors warned that they still don’t know anything completely clear to other borrowers looking at key capital sources.
Several investors pointed out a lack of leveraged loan issuance. This is a relatively high rating on Venture Global’s bond sales, which is considered a deeper capital source for the private equity industry and is used to repay existing debts.
Investors added that, despite milder trading, lower-rated borrowers still don’t have a clear path to the market after a massive sale in early April. The bond and loan fund reported record-breaking outflows the week after Trump’s “liberation date.”
Venture Global’s high yield agreements follow the revival of the investment aptitude bond market after large US banks, including Morgan Stanley and JPMorgan Chase, issued new debt following the latest revenue announcements. Bankers were waiting for highly rated companies to test their waters before the primary market reopened for more risky issuers.
“It feels like movement [in high yield] One banker said: “If you have a double-B [company] If ready, the market is not closed. But that hurts a little more. ”
Analysts with credit rating agency S&P Global have assigned a Double-B-Plus rating, just one less than the investment grade, to venture into Global’s debt. Moody’s and Fitch were more cautious, and debt valued double b.
But nonetheless, the rating is near the top of the Junk Universe, and Venture Global is able to lock a yield of around 7.75% on new 10-year bonds.
The new LNG Exporter product came alongside the group’s announcement that it is beginning commercial operations at the Calcasieu Pass project, located along the coast of Louisiana in the Gulf of Mexico.
Venture Global declined to comment. Mizuho, who led the contract with more than 12 Wall Street banks, did not respond to requests for comment.
