Energy XXI Inverted Yield Curve

The unsecured note due December 2017 is trading at a yield to maturity of ~80 percent.

The unsecured note due February 2018 has a yield to maturity of ~57 percent.

Also interesting: the secured (second lien) 11% note that was just issued in March has tanked to a price of 70. Huge loss for the buyers of $1.45 billion of those notes!

The EXXI balance sheet doesn't make sense with oil futures low for years. The company has roughly $4.5 billion of debt, with an annual interest bill going forward of ~$385 million. The market value of that debt is only ~$1.75 billion, so there's an enormous "hole" of ~$2.8 billion! (The "hole" can be thought of as the degree to which the equity is out of the money.)