Distressed energy space shrinks; related names holding strong along with oil

By Cristal Cody

Tupelo, Miss., Feb. 16 – Fewer energy names are seen in the distressed market so far in 2024 as oil prices remain strong.

“Sort of what’s happened is there isn’t as much distressed to speak of anymore and certainly not in energy,” a source said Friday.

Issuers including Occidental Petroleum Corp. are now traded as high-grade issues.

The company’s 8 7/8% notes due 2030 (Baa3/BB+) were quoted Friday at 116 bid and yielding 5 5/8%.

Once distressed oilfield services name Transocean Ltd.’s $525 million of 8 3/8% senior secured notes due 2028 (B2/B) priced a year ago on Jan. 9, 2023 at par have improved considerably.

“The bonds are trading around 103, 103½,” a source said. “They’ve tightened about 100 basis points from new issuance. They’re doing fine.”

West Texas Intermediate crude oil benchmark futures for March delivery settled Friday $1.16 higher at $79.19 a barrel.

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