[Editor's note: A version of this story appears in the May 2021 issue of Oil and Gas Investor magazine.]

There is an E&P IPO again—the first one since 2017. Some producers are refinancing 5% debt at less than 1%. Equity and debt issuances to fund acquisitions are happening. Investment banking to E&Ps isn’t over. Deals are just fewer for now, according to financiers.

In particular, high-yield debt to oil and gas producers is back. It’s just less obvious. The interest rates today reflect that the federal funds rate is virtually 0%. “High yield really isn’t ‘high’ anymore,” said Tim Perry, co-chairman, global energy group, for Credit Suisse Securities (USA) LLC. “The vast majority of issuances are getting done at single-digit coupons—significantly below double digit, in some cases.”

For the time being, “high yield” has become somewhat of a misnomer. “It doesn’t seem like high yield, but some of them are,” he said.

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