Marc Lasry Thinks Oil Company Senior Debt Is A Solid Bet
With the recent declines in crude oil pushing below $50 and wiping all the gains it made during the second quarter, investors and traders are confused over the potential future moves of oil prices by year end.
However, according to one of the best distressed debt investors, investors do not need to take a bullish or bearish call on oil, but rather, value can be found through investing in oil company debt.
Famed debt investor Marc Lasry, chairman, CEO and co-founder of Avenue Capital Group and part owner of the NBA Milwaukee Bucks, will feature on this Sunday's edition of Wall Street Week. In an excerpt from that interview, Lasry discussed how the time is right to make a bet on senior debt of oil companies.
No Need To Make A Commodity Play
"So, our view of oil is at $50, which is roughly where it is, we are not going to tell where oil goes," Lasry said. "What we can do is, we can look at where the debt of those companies are trading. And at $50, you want to be in that senior debt."
He continued, "If the oil is at $75, you want to own equity, right? So, we don't need to make a commodity play. Really what we are doing is making a credit play.
"But, because of all the issues the company is having, because of where oil is, the senior debt has traded down, and you are able to buy that senior debt at a big discount," Lasry suggested.
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