Commodity-related bonds stay under pressure to end week; Getty Images debt weakens, AMD holds

By Stephanie N. Rotondo

Phoenix, July 24 – Distressed commodity-linked bonds remained weak Friday, though actual commodities were mixed on the day.

Oil prices remained depressed, but gold saw a bit of a rally.

A trader noted that the week’s slumping commodity sector “dragged down” First Quantum Minerals Ltd.’s debt. He saw the 7¼% notes due 2022 ending at 82, versus levels around 85 previously.

For the week, he said the issue was off 7 to 8 points.

Another trader pegged the 7¼% notes at 82¾, off over 2 points on “pretty good volume for them.”

The second trader also saw the 7% notes due 2021 falling a point to 83½.

In the oil arena, a trader said California Resources Corp.’s 6% notes due 2024 were “pretty active.” He said the issue opened the day “north of 80,” but trended weaker as the day wore on, eventually ending at 79½.

Another trader placed those notes at 79, which he deemed unchanged.

The trader also remarked that the CalRes bonds were the “big mover” of the day, with nearly $50 million of the notes trading.

Chesapeake Energy Corp. meantime continued its descent. Those bonds have been on the decline since the company announced it was cutting its stock dividend earlier in the week.

A trader saw the various debt instruments losing about a quarter-point to a half-point. The 5¾% notes due 2023 ended at 82¾, as the 4 7/8% notes due 2022 closed at 79 5/8.

The 6 5/8% notes due 2020 were seen dropping the most, closing down 1½ points to 89.

And, Halcon Resources Corp.’s 8 7/8% notes due 2021 fell half a point to 50½, but its 9¾% notes due 2020 rose a quarter-point to 51¼.

Getty drops, AMD steady

As the markets weakened on a commodity slump, even non-commodity related names were feeling the pain.

A trader said Getty Images Inc.’s 7% notes due 2020 were off 10 points over the course of the week, though he had heard no news that would account for the decline. In Friday trading alone, the paper traded down to a 36 to 37 context from around 39½ previously.

Some names were even looking to recoup their losses in the last trading day of the week.

Advanced Micro Devices Inc.’s bonds were “still active but for the most part unchanged,” according to one trader.

However, another market source deemed the 7½% notes due 2022 a point better at 66 bid.

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