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UPDATE 1-CDS on Halliburton, Transocean widen sharply-Markit

Fri Apr 30, 2010 9:58am EDT

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NEW YORK, April 30 (Reuters) - The cost of insuring debt of Halliburton Co and Transocean Inc against default rose sharply on Friday amid mounting worries about potential liability related to an oil rig accident in the Gulf of Mexico.

Switzerland-based Transocean Ltd (RIG.N) RIGN.S operated the oil drilling rig that exploded in flames on April 20 and collapsed two days later, leading to massive oil spill. Halliburton (HAL.N) has said it did a variety of work on the rig.

Credit default swaps on Halliburton rose by 11 percent on Friday to about 71 basis points, while swaps on Transocean Inc. climbed 6 percent to about 95 basis points, according to data from Markit Intraday. Rising credit default swaps indicate investors see greater credit risk at the companies.

Halliburton's credit insurance costs have risen by about 27 percent since the accident, while Transocean's have surged by 46 percent. (Reporting by Dena Aubin; Editing by Theodore d'Afflisio)

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Comments (1)
Stockaccume wrote:
IMPORTANT POST: It will shortly be published that, as is always usual when renting any rig, the renter holds Transocean completely harmless from all liability, including all cleanup for a spill or envronmental disaster. BP or its insurers may even owe the Transocean insurers money for the rig itself. BP has when renting this rig, assumed all liability in various agreements. That is always the case. BP, not Transocean hired Haliburton, and paid for and took responsibility for maintenance of all equipment on the rig, including the emergency capping system. It is always in writing. The news will shortly be that BP bought the whole problem when they rented the rig for their own production, not Transocean. Cramer is in a lot of ways a wonderful guy, smart, entertaining. But his advice history, he recommended buying BP significantly before the accident, and was heavily promoting BP as his “PICK” for many weeks on his TV show and to his investors and followers. Now in trying to keep the BP stock price from falling further for his investors and followers (and his own sizeable investment) he, and others with a common cause in protecting their BP investments are publishing press releases on ultimately responsibility, with no fact basis. Stay away from BP. The government has already hinted multiple times, it is BP’s ultimate and clear responsibility. That will continue to be the fact published, and more so when Transocean lawyers shortly come to its defence in the press, showing the hold harmess agreements. Selling RIG now is an great error. Buying BP was a mistake one just has to live with. A bad way for Cramer to come to BP’s defense. We will see during May-July the published hold harmless agreements holding Transocean harmless. I am considering buying Transocean today. Last days perhaps to do this before Transocean comes to its defense and shows the clear hold harmess agreements to the news and public, which obviously exist. This is a very important post. STOCKACCUMULATO

Apr 30, 2010 11:14am EDT  --  Report as abuse
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