Distressed oil and gas names improve as crude prices rise; Peabody still strong; Navistar remains active

By Stephanie N. Rotondo

Seattle, Sept. 8 – Another surge in domestic crude oil prices pushed up distressed energy names on Thursday.

Chesapeake Energy Corp.’s 6 5/8% notes due 2020, for instance, added 1½ points to close at 91 bid, according to a market source. Sector peer Denbury Resources Inc. saw its 6 3/8% notes due 2021 tick up half a point to 74½.

Canadian oilsands producer MEG Energy Corp. was also better, its 7% notes due 2024 gaining a point to close at 81 bid.

Oil prices rose nearly 4% on the day to $47.93 a barrel. The gains came in the wake of the U.S. Energy Information Administration’s weekly report, which showed a 14.5 million decline in crude inventories last week.

The large draw was attributed to tropical storms and Hurricane Hermine.

The report also showed that imports declined by 1.8 million barrels a day.

Also in the energy arena, but away from oil and gas, Peabody Energy Corp.’s 6½% notes due 2020 continued to firm, adding almost 2 points to close around 24.

Among the week’s more notable names, Navistar International Corp.’s 8¼% notes due 2021 remained on the busier side. The paper has been on the radar since Tuesday, when Volkswagen announced it was taking an equity stake in the company.

The notes inched up a quarter- to a half-point on the day, finishing around 97½, according to a source. The bonds had traded down about that much on Wednesday, as profit takers took advantage of Tuesday’s 15-point gain.

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