Decline in crude pressures distressed oil and gas bonds; Intelsat stays active, steady

By Stephanie N. Rotondo

Seattle, March 29 – The distressed debt market was weakening in Tuesday trading, even as the broader markets firmed up.

Traders also noted that liquidity wasn’t stellar. A speech from Janet Yellen, chairman of the Federal Reserve, was just “one of the excuses,” a trader commented.

In her speech in New York, Yellen said that the central bank must exercise caution when raising interest rates in the future.

But Yellen’s speech wasn’t the only thing holding back distressed investors, according to a trader, as several new high-yield bond issues priced during the session.

As for distressed dealings, another reduction in domestic crude oil prices put the focus back on the energy space.

Oil traded down 2.44% to $38.43 a barrel. That was, however, better than the earlier losses. The modest rebound was attributed in part to Yellen’s remarks.

Those remarks were stilted by comments regarding an upcoming meeting of OPEC and non-OPEC producers regarding a production freeze that indicated Iran – which is expected to attend the meeting – might not participate.

Away from oil and gas names, Intelsat SA debt continued to be actively traded, though one trader said that it “didn’t seem like there was a lot of movement in price.”

Market sources meantime gave mixed reviews on TerraForm Global debt. The name was notable Tuesday as the subsidiary of SunEdison Inc. said there was a strong likelihood that its parent organization would have to enter bankruptcy.

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