Hexion notes spike on company split-up rumors; distressed energy names lead trading

By James McCandless

San Antonio, Feb. 9 – Traders said that much of the distressed debt market remained relatively subdued outside of the energy sector Friday, as many investors are reluctant to come off of the sidelines after a volatile week in the equity market.

Notes in Hexion Inc. saw heavy trading on rumors that sponsor Apollo Global Management is considering a split-up of the company.

California Resources Corp. issues entered a second day of high activity, reacting to Wednesday’s news that the company is partnering with investment firm Ares Management in a $750 midstream joint venture.

Another 2 point loss in oil futures led to high volume activity in distressed oil and gas paper. Northern Oil and Gas, Inc., EP Energy, Inc., and Rex Energy Corp. were some of Friday’s most active names.

Frontier Communications Corp. and Intelsat SA stayed atop the telecom space, as Community Health Systems, Inc remained heavily favored in the healthcare sector.

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