Sell Conoco, buy Williams bonds, suggests Goldman Sachs

Williams Company’s 2019 7.625% bonds, trading at a yield of 6% or a spread of 225 basis points, offer good relative value compared to the energy company’s peers, says Goldman Sachs. It says the company is making good progress with its Rockies natural gas business and has substantial growth opportunities in its exploration segment.

However, Goldman pans refining company Sunoco, which it says has the least favourable georgraphic and asset mix of the companies it covers, and faces additional ratings risk following its recent downgrade by Standard & Poor’s to BBB-. The company’s 9.625% 2015 bonds trade at a spread of 285bp.