i think oversold, page-41

http://www.bloomberg.com/apps/news?pid=20601087&sid=agf.xVVNJnM8&pos=5


Gulf Spill Boosts BP, Transocean Debt Costs: Credit Markets

By John Glover

May 13 (Bloomberg) -- Energy companies borrowing costs are rising at the fastest pace in 17 months after an oil rig leased by BP Plc exploded, killing 11 people, spewing crude into the Gulf of Mexico and prompting a moratorium on new drilling.

The extra yield investors demand to hold energy company bonds instead of benchmark government securities jumped 32 basis points since April 28, the biggest two-week increase since the period ended Dec. 4, 2008, according to Bank of America Merrill Lynchs U.S. Corporates, Energy index. The notes are the worst performing industrial debt this month except for basic industries, losing 0.96 percent, the data show.

Borrowing costs are rising as estimates of the cleanup reach $12.5 billion, with BP, Europes largest oil and gas company, on the hook for $8 billion, according to analysts at Sanford C. Bernstein. The London-based companys bonds are suffering along with the debt of other firms involved including Transocean Ltd. and the U.S.s Halliburton Co. Moodys Investors Service and Standard & Poors say they may cut their ratings of BPs debt.

This whole thing is a monster thats going to take years to resolve, said David Kotok, chairman and chief investment officer of Cumberland Advisors in Sarasota, Florida. As we saw with the financial crisis, at the start estimates are small and they rise as more information is obtained.

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CVN has NO DEBT!!!