Energy & Energy Transition

Energy, oil & gas and renewables issuers.

The energy screen is currently dominated by deeply distressed, highyielding emerging market credits facing severe geopolitical, structural, and idiosyncratic headwinds. Notable distress is evident in names like Lukoil and PDVSA, where yields on select maturities have surged to extreme triple and fourdigit levels, reflecting profound market pricing of credit risk and sanctions fallout. Relative value opportunities across the basket require sophisticated navigation of distressed debt dynamics, as illustrated by Petroleos de Venezuela (PDVSA) yielding over 300% and various Lukoil tranches displaying stark yield divergences depending on issuance structure and jurisdiction. Professional fixedincome investors must weigh the deeply discounted cash prices—such as MIEHOL trading at 34.61—against the binary outcomes of restructuring negotiations and asset recoverability. While traditional yieldtomaturity metrics in this cohort are largely theoretical due to imminent default risks or payment freezes, the sector presents tactical distressedforcontrol and eventdriven plays. Yields tapering down into the double digits further down the curve, such as CNECN at 56.96% and SCCPWR at 53.78%, indicate pockets where fundamental asset backing offers a more rational riskadjusted entry point for specialized portfolios.

Results are limited to USD bonds with an amount outstanding of at least USD 200MM.