California Resources notes up as energy receives boost; U.S. Steel lower on ratings cut

By James McCandless

San Antonio, April 3 – The week in distressed debt trading ended with a continued focus on energy names and others feeling the effects of the weakened economy.

California Resources Corp.’s notes rose with improving oil futures despite receiving a ratings downgrade.

The 6% senior notes due 2024 picked up 2½ points to close at 6 bid. The 8% senior secured notes due 2022 improved by 2 points to close at 3 bid.

After the close on Thursday, the Los Angeles-based independent oil and gas producer received a ratings downgrade from Moody’s Investors Service.

Moody’s said that the downgrades reflect its view that there is an elevated risk for a restructuring and a bankruptcy filing after the name was unable to execute a debt exchange.

Last month, California Resources cancelled an exchange offer for three series of notes due to weakened market conditions.

Elsewhere, United States Steel Corp.’s issues declined as it faces its own slate of ratings downgrades.

The 6 7/8% senior notes due 2025 lost 3¼ points to close at 66¾ bid. The 6.65% senior notes due 2037 slid ¾ point to close at 57 bid.

The Pittsburgh-based steel manufacturer was another name to receive a ratings downgrade late in the week.

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