As much as US$74bn of energy bonds could drop from high-grade into junk in the coming months, CreditSights said on Wednesday in the latest red alert over the troubled sector. The warning came as more than 1,000 market players joined a conference call on a day that saw crude prices keep dropping, falling to their lowest level in almost 13 years. Junk bond energy spreads have widened around 600bp in the past two months to T+1691bp, and last week saw the second biggest negative returns on record at 8.68%, according to data from Bank of America Merrill Lynch. With some US$196bn of high-yield energy debt currently trading below par, the prospect of another US$74bn of bonds in the struggling asset class is a deeply worrying prospect. CreditSights analyst Brian Gibbons put the spotlight on 20 companies in the sector that could fall into junk in the months ahead. Among them were Southwestern Energy (SWN), rated BBB- with US$3.8bn of bonds outstanding; Continental Resources (CLR), rated BBB- with US$5.6bn of bonds; Murphy Oil (MUR), rated BBB- with US$2.25bn of bonds; and Ensco (ESV), rated BBB with US$5.5bn of bonds. Moody's Investors Service also warned that this year will see more fallen angels - companies that lose their investment-grade status and fall into junk territory. Half of the 45 victims in 2015 were from the energy, chemicals and metals and mining sectors, Moody's said in a report on Wednesday. A further 21 companies with Baa3 ratings with either a negative outlook, or on review for downgrade, became potential candidates to fall to junk in the fourth quarter, the rating agency said. As often is being said: "A cure for lower prices is low prices". Looks like we need more downside in oil prices, until mass bankruptcies will start, competition decreases and remaining companies resume growth.