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Morning Commentary: BPZ Resources quiet after bankruptcy filing; MGM slips as maturity nears
By Rebecca Melvin
New York, March 10 – BPZ Resources Inc.’s convertibles were quiet early Tuesday after the Houston-based oil and natural gas exploration and production company filed for Chapter 11 bankruptcy protection. The filing followed on the company’s missed payout of its 6.5% convertibles due March 1, so it wasn’t a surprise, a New York-based trader said.
BPZ has $60 million of the 6.5% convertibles outstanding.
The company also has an 8.5% convertible due 2017.
The convertibles were not seen to have traded and were last at 15 to 20, a Connecticut-based trader said.
BPZ shares were down 2 cents, or 33%, to $0.04.
BPZ said that it will continue to operate its business while in bankruptcy and that the filing was prompted by depressed oil prices and a general industry downturn that made it difficult for the company to refinance its debt.
Elsewhere, MGM Resorts International’s convertibles, which mature next month, have been in trade the last couple of sessions and were last at 111.438, which was down 1.8 points outright, according to Trace data early Tuesday. The MGM bonds has lost several points in the last couple of sessions in tandem with lower shares.
MGM shares were at $20.37, which was down 54 cents, or 2.6%, on the day, extending losses notched on Monday. Late last year, the MGM bonds traded at 113.45 with shares at $19.93.
Equities were sharply lower in the early going, with the Dow Jones industrial average and S&P 500 stock index erasing their gains for 2015. The Dow stood unchanged on the year at 17,763.25, which was down 232.47 points, or 1.3%, on the day; and the S&P was at 2,054.96, which was down 24.47 points, or 1.2%, on the day. The S&P closed 2014 at 2,058.90 on Dec. 31.
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