Distressed bonds rebound with equities; coal price gains help debt; Chesapeake steady

By Stephanie N. Rotondo

Seattle, Sept. 30 – The distressed debt market ended the week – and the month – with a firm tone.

“Things were better with the general market,” a trader said. ‘The equity markets rebounded. There was $2 billion in inflows into high yield this week. It all helped general sentiment and pushed things higher.”

Still, with no credit-specific news to push distressed names one way or another, there was limited liquidity in the arena.

With coal prices seen improving, coal producers have seen their debt’s value rising. That was also true on Friday, as Murray Energy Corp.’s 11¼% notes due 2021 moved up “a couple more points,” trading at 57½, according to a trader.

The trader also noted that Peabody Energy Corp.’s 10% notes due 2022 inched up half a point to 41½.

In the oil and gas space, Chesapeake Energy Corp. – which had gained ground on Thursday ahead of pricing of a new convertible debt deal – was steady to slightly better in Friday trading.

A trader said the 8% second-lien notes due 2022 were “about unchanged” at 101½. Another market source saw the 6 5/8% notes due 2020 gaining half a point, ending at 94½ bid.

Late Thursday, the Oklahoma City-based company priced a $1.1 billion offering of 5.5% convertible bonds due 2026, with a conversion premium of 40%.

Initial price talk had the coupon in the mid-6% area with a conversion premium of 25%. Talk was later reduced to 5.5% to 6%.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.