why would a company hedge their energy prices when they'll all be less than 1x levered by the end of this year??
Some energy companies will be DEBT FREE by next year and will have investment grade balance sheets. The need to hedge is to protect cash flows for companies that have levered balance sheets and/or are required to by their bank…
why would a company hedge their energy prices when they'll all be less than 1x levered by the end of this year??
Some energy companies will be DEBT FREE by next year and will have investment grade balance sheets. The need to hedge is to protect cash flows for companies that have levered balance sheets and/or are required to by their banks.
If a company does not have a levered balance sheet, then it should maintain its optionality to the upside w/o selling costless collars that destroy the upside
why would a company hedge their energy prices when they'll all be less than 1x levered by the end of this year??
Some energy companies will be DEBT FREE by next year and will have investment grade balance sheets. The need to hedge is to protect cash flows for companies that have levered balance sheets and/or are required to by their banks.
If a company does not have a levered balance sheet, then it should maintain its optionality to the upside w/o selling costless collars that destroy the upside