Oil and gas bonds dip despite crude gains; coal sector weighed down by Patriot Coal filing

By Stephanie N. Rotondo

Phoenix, May 12 – The distressed debt market traded down with the broader markets on Tuesday.

However, while the rest of the markets ended off of the day’s lows, the distressed arena did not experience much of a rally.

Even the oil and gas space remained weak, despite a 3%-plus gain in crude oil prices.

Energy XXI Ltd.’s 7½% notes due 2021 closed at 39¾, down 1½ points on the day, according to a trader.

Comstock Resources Inc.’s 7¾% notes due 2019 meantime dropped 2 points to 51.

In Midstates Petroleum Co. Inc. paper, a trader saw the 9¼% notes due 2021 falling “almost a point” to 54½, while the 10¾% notes due 2020 declined 1½ points to 56½.

SandRidge Energy Inc. bonds were also getting hit, markets sources reported.

Though the oil space was mostly weak, there were some names that held their ground.

The coal space also continued to be soft. The sector was further pressured in Tuesday trading as Patriot Coal Corp. announced that it had filed for Chapter 11 protections – again.

In the world of retail, J.C. Penney Co. Inc. bonds were finishing with a negative tone. The company is slated to bring earnings on Wednesday.

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