Fracking Ban Threats Seen Hollow in Calfrac Bonds: Canada Credit
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Calfrac Well Services Ltd.’s bonds are outperforming peers as investors bet that U.S. regulators will continue to allow the practice of hydraulic fracturing, which accounts for almost 90 percent of its sales.
Calfrac’s $450 million of 7.5 percent bonds due in 2020 yielded 7.9 percent on Dec. 28, or 625 basis points more than U.S. Treasuries. That compares with a yield of 8.63 percent and a 759 basis-point spread for an index of similar B2-rated U.S. speculative-grade bonds, according to Bank of America Merrill Lynch data.