CALIFORNIA RESOURCES' Chapter 11 bankruptcy protection filing on July 15 took the US high-yield corporate bond default rate to a 10-year high, according to Fitch Ratings, with several other missed bond payments last week signs of further trouble ahead. California's largest oil and gas producer filed for bankruptcy protection after struggling under a heavy debt load since being spun out from Occidental Petroleum in 2014. It joined a growing list of defaulters in the oil and gas sector that have been unable to service weighty debt loads during a severe slump in commodity prices. The filing took the trailing 12-month high-yield default rate to 5.3%, the highest level since May 2010, according to Fitch. The ratings agency expects the overall July high-yield default rate to climb to 5.5% by the end of the month. The number could climb, with at least two at-risk companies missing bond payments due on July 15. Oil and gas producer DENBURV RESOURCES said in an SEC filing on Wednesday that it had opted not to make a US$3m payment due on its 4.625% senior subordinated notes due 2024, "to evaluate certain strategic alternatives". The company has a 30-day grace period to make the payment before it is considered an event of default. The bonds have been trading at just two cents on the dollar in the secondary market, according to MarketAxess. chaparral enercy also missed a US$13.1m interest payment and has struck a two-week forbearance agreement with lenders on its credit agreement. There were US$8.3bn of bond defaults in June, according to Fitch, with almost 80% coming from the energy sector.
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