SandRidge swings to a loss, bonds weaken; oil and gas debt declines; Fannie, Freddie firm

By Stephanie N. Rotondo

Phoenix, Aug. 6 – There was more weakness in the distressed oil and gas space on Thursday, spurred by yet another decline in crude oil prices and disappointing earnings.

Benchmark crude prices dropped nearly 1% during the session, nearing a six-year low. The drop came as oversupply concerns grew, especially as the busy summer-driving season neared its end.

As for earnings, SandRidge Energy Inc. reported a $1.4 billion loss for the quarter on Thursday.

On the heels of the results, one market source pegged the company’s 7½% notes due 2021 at 28¼ bid, down almost a point on the day.

Chesapeake Energy Corp.’s 6 5/8% notes due 2020 dropped another 4½ points to 83 bid, a market source said. The paper had lost ground on Wednesday after the company reported a loss of $4.15 billion, or $6.27 per share.

Linn Energy LLC’s 7¾% notes due 2021 were also softening, with a source placing the issue at 50 bid.

That was down over 2 points on the day.

For its part, Linn reported a loss of $379 million, or $1.12 per unit, on July 30.

In other earnings news, Fannie Mae and Freddie Mac paper recovered from its earlier weakness after Fannie came out with its quarterly results.

“Fannie and Freddie are slightly weaker from when they ran up the other day,” a trader said at mid-morning, referring to gains posted after Freddie released its earnings.

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