Press Release

Whiting Petroleum – A Case Study in Using KRIS

NEW YORK, April 1, 2020: Eric Penanhoat, Managing Director for Quantitative Risk provides a case study on using KRIS as a tool to understand the current market turmoil.

Whiting Petroleum Corporation Reaches Agreement in Principle with Certain of Its Noteholders to Pursue Consensual Financial Restructuring
Commences Chapter 11 Reorganizational Process to Right-Size Capital Structure

April 01, 2020 08:31 AM Eastern Daylight Time

 

KRIS information at a glance:

  • Short, medium and long-term KDP (eg 1-month, 6-month and 5-year)
  • Energy Sector 90th percentile KDP

Multiple warning flags for Whiting Petroleum Co, starting in August 2019:

  1. August 2019: KDP jump up and the term structure still shows 6-month and 1-year KDPs below the 5-year KDP.
  2. August 2019 – December 2019: 6-month KDP rises at or above the 5-year KDP level; 1-month KDP rises above the Energy sector 90th percentile 1-month KDP level.
  3. December 2019 – February 2020: 1-month KDP stays at or above 90th percentile
  4. February-March 2020: 1-month KDP rises above the 6-month KDP. Both are well above the long-term KDP. The 1-month KDP reaches much higher than the sector’s 90th percentile KDP and is in the 99th percentile globally at the end of February 2020.

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Founded in 1990, Honolulu-based Kamakura Corporation is a leading provider of risk management information, processing, and software. Kamakura was recognized as a category leader in the Chartis Report, Technology Solutions for Credit Risk 2.0 2018. Kamakura was named to the World Finance 100 by the editor and readers of World Finance magazine in 2017, 2016 and 2012. In 2010, Kamakura was the only vendor to win two Credit Magazine innovation awards. Kamakura Risk Manager, first sold commercially in 1993 and now in version 10.0.5, is the first enterprise risk management system for users focused on credit risk, asset and liability management, market risk, stress testing, liquidity risk, counterparty credit risk, and capital allocation from a single software solution. The KRIS public firm default service was launched in 2002. The KRIS sovereign default service, the world’s first, was launched in 2008, and the KRIS nonpublic firm default service was offered beginning in 2011. Kamakura added its U.S. Bank default probability service in 2014.

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