Offshore Drilling bonds plunge; oil and gas loses steam; Ocwen hit as license in question

By Stephanie N. Rotondo

Phoenix, Jan. 13 – As oil prices gyrated in Tuesday trading, distressed oil and gas names were mostly weaker on the day.

West Texas Intermediate crude oil started the day trading sub-$45 – the first time at that level since April 2009 – but managed to rebound, ending the day up 45 cents at $46.52.

However, Brent crude slipped 26 cents to $47.17.

One name in particular – Offshore Drilling Holding SA – saw its debt drop over 10 points by the end of the session, though there was no credit-specific news to act as a catalyst.

“Just another fallout of the E&P sector,” one trader said of the debt’s decline.

Meanwhile, Ocwen Financial Corp. also experienced a sizable dip as California regulators took moves to suspend the mortgage servicer’s license.

The company’s common stock (NYSE: OCN) declined $4.41, or 36.18%, to $7.78 on well-above average trading.

Altisource Portfolio Solutions SA (Nasdaq: ASPS), a company associated with Ocwen, also weakened, losing $10.45, or 38.79%, to close at $16.49.

For its part, Altisource has scheduled an 11 a.m. ET conference call for Friday “to discuss recent events and strategy,” according to a press release.

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