FAST FIVE: Bankrupt Oil Company Trolls Its Banks, Says They May Fail Too
Bankrupt Oil Company Trolls Its Banks, Says They May Fail Too With US shale companies facing a tsunami of defaults, some companies took the initiative and filed for bankruptcy ahead of the (viral) curve, so to speak, well before of the current corona/crude chaos.
One such company is EP Energy, an El Paso Corp spinoff which filed for bankruptcy in 2019 as a result of the shale sector's renewed slump (and this was when oil was still above $50).
So with its its fate already in limbo after a busted rescue deal, and potential liquidation looming as a result of oil prices that just insultingly low, the company added a new possibility of what could go wrong next: the company's bankers may follow it down the bankruptcy abyss.
“Although we believe that the banks participating in the DIP and Exit Facilities have adequate capital and resources, we can provide no assurance that all of those banks will continue to operate as going concerns in the future, or continue to participate in the facility.” In other words, it's gotten so bad even bankrupt shale companies are now mocking their own banks.
While EP didn't name which banks it was trolling, a quick look at the company's DIP loans reveals the following cast and crew of usual DIP lending suspects, including JPM, Citi, BMO, RBC, Credit Suisse and several other banks.