Oil and gas bonds decline as OPEC holds production steady; Claire’s debt comes in on earnings

By Stephanie N. Rotondo

Phoenix, June 5 – The latest decision from OPEC to keep its production levels steady didn’t do much to help the distressed oil and gas arena on Friday.

Among oil and gas names, SandRidge Energy Inc.’s 7½% notes due 2021 were seen down almost a deuce to 54¾ bid.

In Energy XXI Ltd.’s bonds, the 6 7/8% notes due 2024 were deemed half a point softer at 35½, while the 7½% notes due 2021 declined almost a point to 37¾.

But while distressed energy bonds weakened, oil prices actually managed to rally, even with a stronger dollar.

West Texas Intermediate crude rose 97 cents, or 1.67%, to $58.96 a barrel. Brent crude gained $1.18, or 1.9%, to $63.21.

In addition to the OPEC news – which was widely expected – fresh reports indicated that U.S. rig counts fell by 4 last week, the 26th consecutive week of declines.

Amid all the oil news, a new jobs report from the Labor Department showed improvement.

In May, nonfarm payrolls were up 280,000. Additionally, the report said figures for March and April were revised to account for an additional 32,000 jobs.

That report was given credit for helping the dollar strengthen.

Claire’s earnings disappoint

A trader said Claire’s Stores Inc.’s debt was “a little bit lower after numbers.”

The trader pegged the 8 7/8% notes due 2019 around 48 and the 9% notes due 2019 in an 87½ to 88 context.

For the fiscal first quarter ended May 2, the Chicago-based retailer saw net sales of $320 million, down 9.4% from the year before. Consolidated same-store sales declined 2.5%, with North American stores seeing a 1.9% decline and European stores falling 3.6%.

Adjusted EBITDA came to $37.6 million, which compared to $48.1 million the previous year. Foreign currency exchange issues resulted in a $3.2 million impact.

Net loss was $35.4 million.

At the end of the quarter, cash and equivalents were $22.5 million, including $2 million of restricted cash.

Elsewhere in the retail space, Chino Intermediate Holdings A Inc.’s 7¾% PIK notes due 2019 were “a touch better,” according to a trader, after falling about 3 to 4 points in the previous session on the back of earnings from indirect subsidiary, J. Crew Group Inc.

The trader placed the debt around 82.

© 2015 Prospect News.
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