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U.S. Steel notes trade lower as belts tighten; Oasis Petroleum up despite ratings cut
By James McCandless
San Antonio, March 27 – Capping the week in distressed debt activity, the focus remained on energy and manufacturing names getting squeezed by recent economic weakness.
United States Steel Corp.’s notes dropped after the company announced it was reducing spending plans and idling some operations.
The 6¼% senior notes due 2026 fell 7¾ points to close at 62¼ bid. The 6 7/8% senior notes due 2026 shed 6¼ points to close at 67¾ bid.
The Pittsburgh-based steel producer announced early Friday that it is reducing its capital spending for 2020 by $125 million to $750 million in response to economic weakness due to the pandemic.
At the same time, the company said that it would increase its borrowings under its revolving credit facility by $800 million.
Considering the current conditions, the company also decided to idle one of its furnaces immediately and idle some operations at two facilities starting in May.
Also on Friday, S&P Global Ratings lowered the company’s senior unsecured debt rating to B- from B.
In the energy space, Oasis Petroleum Inc.’s issues moved up despite a ratings downgrade late Thursday.
The 6 7/8% senior notes due 2022 added 1½ points to close at 29 bid. The 6¼% senior notes due 2026 tacked on ¼ point to close at 17¾ bid.
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