The cost of debt for oil energy companies like BP (NYSE:BP), Transocean (NYSE:RIG), Anadarko Petroleum (NYSE:APC) and Halliburton (NYSE:HAL) have soared the most in 17 months after the explosion on the oil rig Deepwater Horizon, which resulted in the deaths of 11 people.
Since April 28, investors have pushed up the yield of bonds of energy companies by 32 basis points, the largest surge since December 4, 2008.
Extra yields on BP bonds have investors pushing them up by 115 basis points, equal to 1.15 percentage point since April 28.
The extra cost to BP from higher interest would be $182 million annually to refinance the $24 billion in bonds if they were rolled over at today's rates.
Bonds for Transocean, which are valued at $500 million with 5.25 rate and due in 2013, decreased significantly from close to 82 basis points to 206 basis points.
For Halliburton, $400 million of their 5.9 percent notes due in 2018 moved from 77 basis points to 131 basis points.
Anadarko Petroleum bonds plunged 6.07 percent when contrasted with government securities. The above changes are based from April 28.
Other costs associated with the circumstances is the increased cost of insuring the credit default swaps on the bonds, with BP debt increasing to 81 basis points from the prior 46 basis points. That means there is growing pessimism as to the quality of the credit of a company.
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