From ZeroHedge:
The "Revolver Raid" Arrives: A Wave Of Shale Bankruptcies Has Just Been Unleashed
Back in early 2007, just as the first cracks of the bursting housing and credit bubble were becoming visible, one of the primary harbingers of impending doom was banks slowly but surely yanking availability (aka "dry powder") under secured revolving credit facilities to companies across America. This also was the first snowflake in what would ultimately become the lack of liquidity avalanche that swept away Lehman and AIG and unleashed the biggest bailout of capitalism in history. Back then, analysts had a pet name for banks calling CFOs and telling them "so sorry, but your secured credit availability has been cut by 50%, 75% or worse" - revolver raids.ZeroHedge Has been very good with the names of the doomed.
Well, the infamous revolver raids are back. And unlike 7 years ago when they initially focused on retail companies as a result of the collapse in consumption burdened by trillions in debt, it should come as no surprise this time the sector hit first and foremost is energy, whose "borrowing availability" just went poof as a result of the very much collapse in oil prices.
As Bloomberg reports, "lenders are preparing to cut the credit lines to a group of junk-rated shale oil companies by as much as 30 percent in the coming days, dealing another blow as they struggle with a slump in crude prices, according to people familiar with the matter....MORE
In our Jan 7 post, Oil: "The First Shale Casualty: WBH Energy Files For Bankruptcy; Many More Coming" (the most leveraged energy companies) they linked back to an extensive December list of the most levered and on Jan. 23 they posted "These Shale Companies Will File For Bankruptcy First: Goldman's "Best And Worst" Shale Matrix".
Jan. 8's "Citigroup Goes All Medieval On the Energy Sector, Takes Quarterstave and Broadsword to Estimates" looked at some of the larger E&P's
