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TWN Info Service on Climate Change (Oct20/02)
1 October 2020
Third World Network

Dear friends,

We are pleased to share with you a new report “Big Oil’s $100 Billion Bender: How The U.S. Government Provided a Safety Net for the Flagging Fossil Fuel Industry” from Friends of the Earth US, Public Citizen, and BailoutWatch.

This critical report exposes how the Trump administration’s corporate bailouts has aided failing fossil fuel companies; in stark contrast to lack of COVID-19 assistance for ailing American families. As the co-author Lukas Ross, Program Manager with Friends of the Earth said, “Big Oil is exploiting COVID-19 to go on an unprecedented borrowing binge, and the Trump administration is to blame. Polluters are getting a $100 billion lifeline while most Americans are being left behind.”

Among the key findings of the report are as follows:

  • A total of 56 oil and gas companies have issued $99.3 billion in debt in U.S. markets since the Federal Reserve began its bailout of corporate debt markets in late March. Some said they might fail without the fresh financing.
  • The Fed has purchased debt from a total of 19 oil and gas companies. Those companies have sold debt investors more than $60 billion in new bonds since the Fed’s intervention began, representing about 60 percent of energy debt issuance in that period. Of those 19 companies, 12 have received downgrades of their short-term debt, long-term debt, credit, or default ratings from major credit rating agencies since March.
  • Oil and gas companies incorporated in the U.S. have issued $129 billion in new bonds this year, according to Bloomberg data. This tally is a record for the year to date going back at least a decade. The first three quarters of 2020 represent the highest level of energy debt issuance for that period since at least 2010. This surge in borrowing was made possible by the Fed’s promise to purchase large quantities of corporate debt.
  • Of the 122 new bond issuances reviewed, 93 will be used at least in part to pay down or refinance a specifically named existing debt such as commercial paper, revolving credit lines, or other bonds. At least 15 companies are issuing new bonds to replace existing bonds that had higher coupon rates.

The report is available here: https://prismic-io.s3.amazonaws.com/bailout/1b1e1458-bbff-49bc-a636-f6cbd47a88af_Big+Oils+Billion+Dollar+Bender.pdf

With best wishes,
Third World Network

 


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