Credit markets are showing some signs of life after months of inactivity, with energy companies helping to lead a surge in new debt and equity deals in recent weeks.
Companies have started to raise funds through sales of debt and equity at a pace not seen since last spring, according to data tracking firm Dealogic.
Globally, new corporate debt sales totaled $91.4 billion last week, the highest since last May when $103 billion was sold.
So far this year energy firms have raised $6.8 billion in debt in the U.S., while globally energy firms account for $37.5 billion in new debt. The surge has included firms with strong Houston ties.
In December, Kinder Morgan Energy Partners, Enbridge Energy Partners and El Paso each raised $500 million in debt. And earlier this month Devon Energy, Weatherford International and Nabors Industries raised close to $1.2 billion each.
Most of the companies are the kind that benefited from the high oil prices last year or have steady cash flows through assets like pipelines, said Bryce Linsenmayer, an attorney with Haynes & Boone in Houston. "But I'm still surprised at how January has started," Linsenmayer said.
Kinder Morgan originally wasn't planning to raise money through the debt markets in the fourth quarter of last year, President Park Shaper said. But the pipeline and terminals giant decided to raise $500 million in December in part to show the markets that it could.
"There was so much uncertainty that we wanted to show everyone we could access capital and take away some of the concerns about our needs later in 2009," Shaper said.
The proceeds from the 10-year notes the firm sold and another $177 million raised in December through issuing new equity will go toward expansion projects.
"We don't need it for our ongoing operations because our assets are the kind that need to operate in any business environment, moving fuel to drivers in Arizona and California or natural gas from suppliers to the users," Shaper said.
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