Photographer: Martin Divisek/Bloomberg

Goldman Sachs Says 40% of Its Oil, Gas Lending to Junk Firms

  • Bank has $10.6 billion in loans and commitments to the sector
  • Derivatives, related contracts add an additional $1.9 billion

Goldman Sachs Group Inc. said about 40 percent of its oil and gas loans and lending commitments are to junk-rated firms.

The figure, which counts both loans made and future promises to lend, accounted for $4.2 billion of a total $10.6 billion as of the end of December, the New York-based bank said Monday in its annual regulatory filing. Goldman Sachs has $1.5 billion in loans to energy companies rated below investment grade and $2.7 billion in unfunded commitments.

The total exposure jumps $1.9 billion counting derivatives and other receivables, which were “primarily" to investment-grade firms, Goldman Sachs said. The bank’s market exposure to oil and gas firms was negative $677 million compared with $805 million a year earlier.

Concerns about banks’ energy loans have helped spur share declines for lenders after the price of oil fell 42 percent in the past 12 months through Friday. The Standard & Poor’s 500 Financials Index slumped 13 percent in the same period.

Goldman Sachs is among the lenders to Oklahoma City-based Chaparral Energy Inc., a closely held oil and gas producer that this month tapped the full $550 million available under its credit line and hired legal and financial advisers, according to regulatory filings compiled by Bloomberg.

Goldman Sachs’s total is less than of its biggest competitors. Citigroup Inc.’s funded and unfunded commitments amounted to $58 billion, analysts at Susquehanna Financial Group LLP wrote in a note last week. Most of Wells Fargo & Co.’s $17 billion in outstanding energy loans is for companies that aren’t investment grade, Chief Financial Officer John Shrewsberry said last month.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE