PetSmart notes trade off on pulled offering; energy sector continues to decline

By Abigail W. Adams

Portland, Me., Oct. 30 – It was another ugly day for capital markets with losses continuing to mount for CCC-rated credits and the energy sector.

Credit spreads widened substantially over the past week with CCC-credits the biggest underperformers.

The credit tier widened over 115 basis points in the week through Wednesday’s close, according to a BofA Global Research report.

“It’s been rough,” a source said.

While some market players were trying to reel in risk, hedge funds were leaning into certain names, particularly in the energy sector with WTI crude oil futures down 10% on the week, the source said.

Occidental Petroleum Corp.’s notes continued their decline on Friday as concern over slowing demand due to a resurgence of Covid-19 weighed down energy names.

The fallen angel’s 6 5/8% senior notes due 2030 dropped almost 1 point to 88.

Occidental’s 8 7/8% senior notes due 2030 were down ¾ point to 98¼, a source said.

However, PetSmart Inc.’s senior notes were in focus and were among the largest losers of Friday’s session after the pet specialty products retailer pulled its megadeal from the market due to investor pushback and market volatility.

PetSmart’s 7 1/8% senior notes due 2023 were down 2¼ points to close the day at 98½, a source said.

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