A positive view on DLS...., page-16

Big sell-off at the top of the junk pile last week and it could translate into significant defaults. I've been talking about this theme for a long while. When debt defaults, debt restructuring and hedge positions run their course in the US (probably by the end of 2106) we should see a good recovery in the oil price.

Luckily DLS's debt is longer dated so it should survive the worst of the rout. So in my opinion in terms of contrarian cyclical commodity plays DLS should provide a shorter wait for a return (than say investing in iron ore, met coal, coal, copper, nickel etc) for people buying the current dip (keep a little powder dry in case it goes deeper and longer I say). I would still be interested to see a chart of the price of the DLS convertible notes which are supposed to be traded out of Singapore. Still no one who can hunt this down. How weak are our combined research skills?

Eshmun

http://www.bloomberg.com/news/artic...junkyard-s-dogs-as-oil-rout-extends-yield-gap

"The yield gap between BB-rated bonds -- the top of the junk pile -- and those ranked CCC and lower expanded to 8.1 percentage points, the most since October 2011, according to Bank of America Merrill Lynch index data. The yield premium for energy companies rated junk versus all high-yielders expanded to as much as 3.66 percentage points last week, the most on record."

"The plight of these high-yield energy companies may next be seen in default rates, which could reach 25 percent in the next year in the B and CCC categories, assuming current commodity prices, according to a UBS Group AG research report Thursday."