Distressed bonds little fazed by weak oil prices; Arch Coal rises; Intelsat remains firm

By Stephanie N. Rotondo

Seattle, Aug. 31 – Distressed bonds were trending toward the upside in month-end trading, even with a sizeable dip in domestic crude oil prices.

Crude oil prices declined 3.3% to $44.82 a barrel after the U.S. Energy Information Administration reported that crude and refined products rose by 4.5 million barrels last week.

For its part, crude inventories climbed by 2.3 million barrels, well more than the 1.2 million-barrel gain forecast by analysts polled by The Wall Street Journal. Gasoline stocks fell by 700,000 barrels, but analysts were expecting a bigger draw.

But despite the commodity’s softness, energy names weren’t much changed on the day.

California Resources Corp.’s 8% second-lien notes due 2022 were down about half a point to a 67½ to 68 context, according to a market source. Sector peer Chesapeake Energy Corp.’s 8% second-lien notes due 2022 were meantime steady at 95¼ bid, 95½ offered.

In the broader energy space, Arch Coal Inc. paper was heading for higher ground, though there was no fresh news to act as a catalyst.

Arch’s 7% notes due 2019 and 7¼% notes due 2021 closed in a range of 3¼ to 3½, up from 2¾ to 2 7/8 previously.

Away from energy, Intelsat SA continued to draw investors’ attention after the company said Tuesday that it was swapping the remaining $142 million of 6 5/8% notes due 2022 linked to Intelsat Jackson Holdings SA.

© 2015 Prospect News.
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