SandRidge rebounds, trouble remains; MolyCorp weaker after downgrade; LightSquared tweaked

By Stephanie N. Rotondo

Phoenix, June 2 – The distressed oil and gas sector remained in focus on Tuesday, upstaged only by new high-yield issues.

Specifically, a trader said Petroleo Brasileiro SA – or Petrobras, as it is more commonly referred to – and its new $2.5 billion of 6.85% notes due 2115 were front and center.

The trader said over $360 million of the notes were exchanged during the session, accounting for over 10% of all high-yield trading.

The issue priced Monday at 81.07 with an 8.45% yield.

Back in the distressed realm, SandRidge Energy Inc. bonds continued to be active. But after several sessions of losses, the debt managed to end with a firmer tone.

“I guess they found a little bit of a base,” a trader said.

MolyCorp Inc. was meantime weaker as Standard & Poor’s declared the company’s recently missed coupon payment a default.

Also in ratings news, a trader said there was “no real reaction” in MagnaChip Semiconductor Corp.’s 6 5/8% notes due 2021 after Moody’s Investors Service downgraded the company and the notes to Caa2 from Caa1.

“I think the market is just shrugging it off,” he said.

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