Hopes of high yield in energy healing were dashed when the outbreak of the coronavirus occurred in China, driving debt markets back to a bifurcated status. The debt market door remains open for higher-rated issuers, but it slammed shut for lower-rated names, as WTI prices slumped from north of $60/bbl at year-end to barely $50/bbl by late January.

Fortunate were those that dashed through the door late last year, before fears emerged that crude demand was collapsing in China and elsewhere due to the coronavirus outbreak. Energy companies that managed to close high-yield deals saw, in several cases, their issues trade down to low double-digit discounts to par as sentiment in the energy sector swooned.

Range Resources Corp.’s senior notes, for example, were priced to yield 9.25% and traded down to yield about 12% by the end of January, according to Tudor, Pickering, Holt & Co.

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