SandRidge bonds jump on debt repurchase and exchange news; Abengoa rebounds; Murray tanks

By Stephanie N. Rotondo

Phoenix, Aug. 14 – Strength was returning to the distressed debt market on Friday as a combination of fresh economic data and credit-specific news helped drive bonds higher.

On the heels of Thursday’s positive retail sales report, new data out Friday – including readings from the U.S. Producer Price Index – indicated that inflation was inching up. That data was taken as a strong argument for a potential interest rate hike in September from the Federal Reserve.

In distressed dealings, SandRidge Energy Inc. got a decent boost after the struggling oil and gas producer announced a debt redemption and exchange totaled at $525 million.

A trader said the company’s bonds were up as much as 4 to 5 points during the session, though they “settled in” by the close.

Abengoa SA meantime posted huge gains on the day, following an outpouring of headlines. Bloomberg reported that banks were advising the Spanish company to increase its proposed rights offering amount – though that claim was later denied.

But for all the day’s strength, some names just couldn’t catch a break.

Murray Energy Corp., for instance, saw its debt take a big hit after the coal producer lowered its outlook.

The change in guidance came just after the company announced the purchase of its first overseas assets.

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