BlackRock Long Term Municipal Advantage Trust
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Company profile

BlackRock Long-Term Municipal Advantage Trust (the Trust) is a non-diversified, closed-end management investment company. The Trust's investment objective is to provide current income exempt from regular federal income tax. The Trust seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its assets in municipal obligations and derivative instruments with exposure to such municipal obligations, in each case that are exempt from federal income tax (except that the interest may be subject to the federal alternative minimum tax). The Trust invests primarily in long-term municipal bonds with a maturity of more than 10 years at the time of investment. The Trust's municipal bond portfolio will have a dollar-weighted average maturity of more than 10 years. The Trust may invest directly in such securities or synthetically through the use of derivatives. BlackRock Advisors, LLC is the investment manager of the Trust.

Closing Price
$12.27
Day's Change
0.01 (0.08%)
Bid
--
Ask
--
B/A Size
--
Day's High
12.27
Day's Low
12.26
Volume
0

UPDATE: These energy companies have the highest debt and the most at risk as the oil market collapses

6:55 am ET March 12, 2020 (MarketWatch)
Print

By Philip van Doorn, MarketWatch

Expect bankruptcies among highly leveraged U.S. shale-oil producers

Investors shocked at Saudi Arabia's decision to lower oil prices and increase production sent financial markets reeling. A concern now for the oil and gas industry is which players can survive a prolonged market imbalance.

West Texas crude oil for April delivery fell as much as 25% to $31.13 a barrel Monday. That action followed Saudi Arabia's announcement Saturday that after failed negotiations between OPEC and Russia to cut production in an attempt balance supply with reduced demand as the coronavirus spread, it would actually lower its own prices while increasing production.

"Now the question is, what is the Russian response?" said Philip Orlando, chief equity market strategist for Federated Hermes, in an interview. "Do they hold their breath until they turn blue? Or do they say, 'You have the market weight here, why don't we sit down to cut and stabilize the market?' That may be too obvious and rational, so I have no idea how this is going to end up."

Read:Why an oil price war is wreaking havoc on stocks and global financial markets right now (http://www.marketwatch.com/story/why-plunging-oil-prices-are-wreaking-havoc-across-financial-markets-right-now-2020-03-09)

Highly leveraged energy companies

Banks with heavy exposure to the energy industry may be facing defaults, loan losses and other fallout. Here's a list of banks with the most exposure (http://www.marketwatch.com/story/you-should-avoid-shares-of-these-banks-with-too-much-oil-and-gas-exposure-2020-03-09) as a share of tangible common equity.

But how about the energy borrowers? Starting with the S&P Composite 1500 (made up of the S&P 500 , the S&P 400 Mid Cap Index and the S&P Small Cap 600 Index ), here are the 20 U.S.-listed oil companies with the highest percentages of long-term debt to equity, according to FactSet, based on their most recent regulatory filings as of March 6:

Company Ticker Long-term debt/ equity Industry

Equitrans Midstream Corp. US:ETRN 90.2% Oil & Gas Pipelines

Tetra Technologies Inc. US:TTI 84.6% Oilfield Services/Equipment

Apache Corp. US:APA 71.8% Integrated Oil

Core Laboratories NV US:CLB 66.1% Oilfield Services/Equipment

Oneok Inc. US:OKE 66.0% Oil & Gas Pipelines

U.S. Silica Holdings Inc. US:SLCA 63.1% Other Metals/Minerals

Archrock Inc. US:AROC 63.1% Oilfield Services/Equipment

Nabors Industries Ltd. US:NBR 62.8% Contract Drilling

Denbury Resources Inc. US:DNR 60.5% Oil & Gas Production

Gulfport Energy Corp. US:GPOR 59.7% Oil & Gas Production

Consol Energy Inc US:CEIX 58.7% Coal

Laredo Petroleum Inc. US:LPI 58.1% Oil & Gas Production

Halliburton Co. US:HAL 57.7% Oilfield Services/Equipment

Range Resources Corp. US:RRC 57.5% Oil & Gas Production

Williams Companies Inc. US:WMB 56.7% Oil & Gas Pipelines

Exterran Corp. US:EXTN 53.3% Oilfield Services/Equipment

Occidental Petroleum Corp. US:OXY 53.1% Oil & Gas Production

Penn Virginia Corp. US:PVAC 51.7% Oil & Gas Production

Noble Corp. plc US:NE 50.5% Contract Drilling

Source: FactSet

You can click on the tickers for more about each company.

Turmoil, the economy and a silver lining

The S&P 500 hit its most recent record high Feb. 19, showing how long it took for the risk to the global economy from the spread of the coronavirus to affect the U.S. stock market. It has been too early for economic reports to show any effect from supply-chain disruptions or reduced revenue for travel-related industries to hit home.

Last week's employment report showed the U.S. economy added 273,000 jobs during February (http://www.marketwatch.com/story/us-economy-adds-strong-273000-jobs-in-february-but-coronavirus-looms-as-threat-to-hiring-2020-03-06), with the unemployment rate falling back to a 50-year low of 3.5%.

Luca Paolini, chief strategist at Pictet Asset Management in London, believes investors may stage a strong "relief rally" soon, because stock-market action "has been so brutal."

But he also said during an interview that "it is quite unusual for a bear market to anticipate a recession even before we see negative indicators" in the U.S. A brief relief rally aside, he doesn't expect U.S. stocks to bottom until there is a weakening of economic growth.

"Then all the bad news will be out," he said.

As for the game of chicken between Saudi Arabia and Russia, and the effect on U.S. energy producers, Dimitry Dayen, senior research analyst for energy at ClearBridge Investments, said in an interview that "the vast majority" of U.S. shale oil producers "are not cash flow positive," and that "you will see bankruptcies" for some of the most highly leveraged players.

Then again, "you also have some large companies with very low leverage that will come out intact," he added.

In contrast to the companies listed above, Exxon Mobil's (XOM) long-term debt was 12.7% as of Dec. 31, and the ratio for Chevron (CVX) was 15%.

When asked about average costs for oil producers, Dayen said it's more important to look at the minimal price for producers to be cash-flow positive, and for Saudi Arabia and Russia to consider the prices at which their governments (which rely heavily on oil revenue) can balance their budgets.

Shale-production costs in the U.S. market vary, but according to Dayen, "the best players in the Permian Basin [in the Southwest] need crude north of $50 a barrel in order to be cash flow positive," while Russia needs a price of about $42 to balance its budget and Saudi Arabia needs a whopping $75 a barrel.

In a world starved for yield, Russia and Saudi Arabia can borrow heavily to finance their governments. All of this is part of the mix as we wait and see if they blink and return to the negotiating table.

Meanwhile, Dayen expects it will take until the second half of 2020 for the current expansion of U.S. production to reverse, leading to lower production late this year or early 2021, as the world oil market eventually stabilizes.

He sees a hidden benefit for natural gas suppliers: Gas is produced as a byproduct of oil, so a production cut for oil can reduce the oversupply and lead to higher natural gas prices.

Don't miss:You should avoid shares of these banks with too much oil and gas exposure (http://www.marketwatch.com/story/you-should-avoid-shares-of-these-banks-with-too-much-oil-and-gas-exposure-2020-03-09)

Create an email alert for Philip van Doorn's Deep Dive columns here (http://www.marketwatch.com/tools/alerts/newsColumn.asp).

-Philip van Doorn; 415-439-6400; AskNewswires@dowjones.com

(END) Dow Jones Newswires

March 12, 2020 06:55 ET (10:55 GMT)

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