Chesapeake Energy drops on amendment news; Goodrich preferreds pop; Teck dips on downgrade

By Stephanie N. Rotondo

Phoenix, Oct. 1 – Distressed bonds continued to be weak in the first trading day of the month and the quarter.

Chesapeake Energy Corp. was particularly “heavy,” a trader said, following news the company had secured an amendment on its senior revolving credit line that would, among other things, allow for the issuance of up to $2 billion of junior debt.

“The bonds got hit,” the trader said, seeing both the 5 5/8% notes due 2020 and the 7¼% notes due 2018 falling 4½ points to 69¼ and 78½, respectively.

The news was pushing “all the corporates” down, according to a convertibles trader.

But Chesapeake wasn’t the only oil and gas name ending with a softer tone. While crude oil prices spent most of the day on the rise, they ultimately finished marginally lower. Distressed bonds in the sector, however, acted like the commodity was in decline all day.

However, among distressed oil and gas preferreds, Goodrich Petroleum Corp. got quite the boost on the day.

The preferreds were the day’s biggest percentage gainers, by far.

Teck Resources Ltd. was downgraded by Standard & Poor’s on Thursday, which pushed the company’s debt lower.

A trader said the 3¼% notes due 2023 were down a deuce.

© 2015 Prospect News.
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