SandRidge Energy under pressure; MolyCorp trades flat on missed payment; coal remains weak

By Stephanie N. Rotondo

Phoenix, June 1 – A distressed debt trader said it was “a rather inauspicious start to the week” Monday, given the limited liquidity.

SandRidge Energy Inc. was the dominating name of the distressed space. Those bonds – including the new $1.25 billion of 8¾% senior secured second-lien notes due 2020 – were coming in, following the trend of oil prices.

Meanwhile, traders saw very little activity in MolyCorp Inc.’s 10% notes due 2020 after the company said it was skipping a payment due Monday. However, one trader said the debt was “certainly quoted a little lower.”

Also in the commodity realm, coal bonds could not catch a break in Monday trading, according to market source.

One trader said Alpha Natural Resources Inc.’s 6% notes due 2019 were off almost 2 points at 13, while Arch Coal Inc.’s 7% notes due 2019 were down 1½ points to 17½.

The trader also remarked that Peabody Energy Corp. was “fading again,” its 6% notes due 2018 falling “almost 4 points” to end at “67 and change.” The 10% notes due 2022 finished nearly a deuce lower at 74¾.

The trader said he believed the latter issue was lower intraday.

At another desk, a trader said, “Coal was down a bit more.”

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