Burned by Oil Trade, Debt Investors Think Twice This Time Around
- Low oil prices make firms leery of lending to the industry
- Hedge funds, private-equity firms being choosy with deals
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When banks began to scale back financing for energy companies earlier this year amid the slump in oil prices, some of Wall Street’s savviest asset managers sought to capitalize by lending at high rates.
That didn’t work out so well, as crude continued to plunge and lenders were stuck with losing positions. Now, banks are again contemplating credit cuts. But this time hedge funds and private-equity firms are showing more reluctance to step in.