Transocean mostly down as special meeting called; Peabody dips as Lazard hired; Abengoa up

By Stephanie N. Rotondo

Phoenix, Aug. 26 – A “strong rally in the equity markets was lending itself to strength in the distressed market,” a trader said Wednesday.

After two days of hefty losses in the equity arena, the Dow Jones industrial average popped over 600 points in midweek trading.

And while the distressed space was also generally firm, news was moving bonds around more than the overall market’s dealings.

Crude oil prices continued to weaken as new data showed another uptick in U.S. stockpiles, as well as a surprising dip in gasoline demand. That was putting pressure on oil and gas names.

However, Transocean Ltd. had news late Tuesday indicating that it would soon ask shareholders to cancel dividends for the third and fourth quarters. On the heels of that announcement, the offshore oil driller’s debt was coming in.

Elsewhere in the energy arena, Peabody Energy Corp.’s debt ended softer as well. The dip came on a report that the company has hired Lazard Ltd. to advise on a restructuring.

Away from energy, Abengoa SA’s bonds popped after it was reported that banks were giving the Spanish renewable energy producer the go-ahead on a capital increase.

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