Distressed debt activity wanes as market trades off; oil, gas bonds mixed; AK Steel soft

By Stephanie N. Rotondo

Seattle, June 10 – After a recent run-up, distressed debt investors were taking a step back on Friday as weakness pervaded the market.

Aside from new high-yield issues, a trader said that “it didn’t seem like there was a lot of stuff trading, period. There was not a lot of price action, not a lot of notable activity.”

The trader noted that the market has “been ripping” and in the face of a down day – the Dow Jones Industrial index, for instance, was off about 120 points – market players opted to sit and wait.

“Sellers don’t want to hit down bids,” he said. As such, it created a “stalemate in the market.”

The distressed energy sector, for its part, took up the bulk of the day’s activity. But even as domestic crude fell over 3% – falling back under the $50-mark – oil and gas debt was mixed on the day.

Chesapeake Energy Corp. was a good example of the day’s trend. A trader saw the 8% second-lien notes due 2022 were off half a point to 87, while the 6 5/8% notes due 2020 were up a similar amount at 77.

SandRidge Energy Inc.’s 8¾% notes due 2020 were unchanged at 46½, the trader said.

Basic Energy Services Inc. and Legacy Reserves LP both posted gains for the session.

Away from energy, a trader said AK Steel Holdings Corp.’s 7 5/8% notes due 2020 came in half a point to close at 86½.

© 2015 Prospect News.
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