Oil and gas paper gyrates with crude prices; First Quantum remains firm; Avaya bonds drop

By Stephanie N. Rotondo

Phoenix, Oct. 9 – The distressed debt market was “still bouncing some,” a trader said Friday.

Domestic crude oil prices were also bouncing, which in turn caused some gyrations in oil and gas bonds. WTI closed at $49.56 a barrel.

Following that trend, Energy XXI Ltd.’s 11% notes due 2020 traded as high as 62˝ before settling back in to 60˝, according to a trader.

“That’s up on the day, but down from the highs,” he noted.

In oil and gas preferreds, Goodrich Petroleum Corp. was initially moving up but ultimately gave up its gains to close down on the day.

First Quantum Minerals Ltd.’s 7% notes due 2021 also remained on an upward track. The bonds began to gain strength earlier in the week when the company announced it aimed to reduce its debt load by $1 billion by the end of the first quarter of 2016.

While the day – and the week – had a firm tone to it, there were some names that could not catch a break. Avaya Inc. was one such name, according to a trader.

“Those continue to move lower,” he said of the 10˝% notes due 2021. He saw the issue finishing “close to 40.”

The trader noted that the bonds had been trading around 42 at midweek and in a 44 to 45 ZIP code at the beginning of the week.

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