Freeport-McMoRan debt improves on asset sale news; Energy XXI mixed; oil space up

By Stephanie N. Rotondo

Seattle, Feb. 16 – Fresh news combined with a generally firmer marketplace was helping to push up distressed bonds on Monday.

A trader said Freeport-McMoRan Inc. debt was once again “very active,” with the bonds rising several points in the session. The gains came as the company announced it was selling a 13% stake in one of its Arizona-based copper mines for $1 billion.

Also in the commodities space, oil and gas names were firming on reports four top oil producers – including Russia and Saudi Arabia – had proposed freezing crude production at January levels.

Initial enthusiasm for the news faded – and with it crude prices – but the sector’s debt was largely better for the day.

Even Energy XXI Ltd. bonds were better, despite news the company was skipping a coupon payment and is discussing alternatives with debtholders.

Chesapeake Energy Corp.’s 3¼% notes due 2016 inched up a point to 93½, according to the trader. That issue began to pop Friday on news that the company planned to take out the $500 million issue at maturity next month.

Denbury Resources Inc.’s 5½% notes due 2022 were also better, adding almost 2 points to close at 20¼.

Another gainer was Whiting Petroleum Corp. Its 6¼% notes due 2023 firmed a deuce to close at 42, a trader said.

Memorial Production Partners LP went against the day’s grain; its 7 5/8% notes due 2021 were seen slipping over half a point to 24 7/8.

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