Trading slows before holiday; Peabody amends DIP loan; EP Energy, California Resources up

By Colin Hanner

Chicago, Nov. 23 – The distressed bond market saw mild trading heading into the Thanksgiving holiday, as a few names in distressed land reacted to the continued fluctuation of oil and the dipping of the health care sector on Wednesday. The lack of heavy-volume trading characterized the day.

EP Energy Corp. and Linn Energy, LLC were up on the relatively flat levels of oil futures due to speculation surrounding OPEC supply cuts and the hike in the dollar due to bets of an impending interest rate hike.

In coal and metals, Peabody Energy Corp. received approval to amend its debtor-in-possession agreement, and some of its notes continued to build on the momentum generated in Tuesday’s metals rally.

Freeport-McMoRan Inc. saw equites surge as copper continued to climb and trickled over to its distressed bonds.

Health care equity indices were down in early morning trading but rebounded as the day passed, and Community Health Systems Inc. saw modest gains in its notes.

Oil reflected on Russia’s decision to “freeze” instead of “cut” oil supply ahead of next week’s OPEC supply cut meetings, and continued speculation affected the price of oil.

As a result, oil slumped, yet distressed oil names seemed to reflect the overall heightening of oil prices on the week.

California Resources Corp.’s 8% notes due 2022 were up 1½ points to 75½, a trader said.

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