Walter Energy slips as bankruptcy looms; oil and gas bonds mixed amid oil price declines

By Stephanie N. Rotondo

Phoenix, June 8 – The distressed debt market was under pressure – albeit with limited liquidity – in Monday trading, as investors kept their eyes on a looming rate hike and the ongoing Greek drama.

“There wasn’t a ton of activity in anything really,” one trader said.

Also possibly weighing on volume was a lack of any fresh news or data. However, there is a dearth of information coming this week – including a retail sales report on Thursday – which could get things going.

Walter Energy Inc. was in the news, indicating a bankruptcy filing was on its way. The coal producer has been in talks with senior lenders for a couple months now trying to get a deal done.

During Monday’s session, a market source saw Walter’s 9 7/8% notes straddling 3, though trading was only in small pieces. Still, that was down from previous odd-lot trades around 6.

Elsewhere in the coal arena, Arch Coal Inc.’s 9 7/8% notes due 2019 inched up almost a point to 21.

As for the oil and gas sector, it ended the day mixed.

For its part, West Texas Intermediate crude declined 81 cents, or 1.37%, to $58.32 a barrel. Brent crude dipped 51 cents to $62.80.

The declines in oil prices came after OPEC said on Friday that it would hold production rates steady, despite the current volatility in the market. The market is waiting to see how U.S. stockpiles fared in a report due out Wednesday.

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