Distressed bonds begin to find a footing; Chesapeake Energy ends slightly higher

By Stephanie N. Rotondo

Seattle, Sept. 15 – Strength began to seep back into the distressed debt market on Thursday.

“Things in general felt better,” a trader said, adding that equities also rebounded.

A modest bounce in domestic crude oil prices was helping to lift some energy credits, according to traders. Oil improved almost half a percent, trading up to $43.79 a barrel, as gasoline futures rose amid production outages.

For Chesapeake Energy Corp., that meant a “marginal” gain for the day, a trader said, seeing the 8% second-lien notes due 2022 hit a 98¼ to 98 3/8 context.

Another trader called the issue up a shade at 98 1/8.

The Oklahoma City-based oil and gas producer was also in the news on Thursday, as it was reported that a panel of the 2nd U.S. Circuit Court of Appeals in Manhattan upheld a lower court’s ruling that would require the company to pay holders of the 6.775% senior notes due 2019 approximately $439 million, including interest.

The bondholders had sued the company after the issue was redeemed six years prior to maturity, alleging that they were entitled to a “make-whole” premium and that the company failed to give them adequate notice of the call.

Elsewhere in the oil and gas space, Legacy Reserves LP’s 6 5/8% notes due 2021 increased a point to 51¼, a trader said. He also saw Stone Energy Corp.’s 7½% notes due 2022 adding almost a point, closing at 58.

© 2015 Prospect News.
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