Sliding oil prices pull energy issues lower; other natural-resource names also on the slide

By Paul Deckelman

New York, July 6 – Distressed-debt market participants came back to work on Monday following the Independence Day holiday break to find generally weaker levels all around as the larger junk bond market retreated along with equities.

Oil prices fell sharply, a plunge caused in part by jitters related to the surprisingly vehement Greek referendum rejection of a bailout package with many austerity strings attached to it, as well as worries over China’s sluggish economy and the prospect of an Iran nuclear deal.

As a result, energy names such as California Resources Corp., SandRidge Energy, Inc. and Chesapeake Energy Corp. were dragged lower. Rex Energy Corp.’s convertible notes were among the notable losers.

Even Linn Energy LLC’s bonds were off, despite the fact that the company announced plans for an asset sale and finalized previously announced alliances with investors.

Commodity price weakness, spurred by economic worries, also pushed the likes of Peabody Energy Corp. and Fortescue Metals Group Ltd. down.

And Puerto Rico’s bonds were better for a third consecutive session, although on considerably less volume than had been seen last week. The troubled island U.S. commonwealth’s bonds have been recovering from their recent lows since last Wednesday’s announcement that its government made a total of $1.9 billion of scheduled July 1 debt payments, averting a possible default.

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