New issues push distressed bonds off radar; oil price drops, pressures industry debt; Verso up

By Stephanie N. Rotondo

Phoenix, June 24 – Distressed debt was taking a backseat to new issues from Endo International plc and Ball Corp. in midweek trading.

Endo priced $1.64 billion of eight-year notes on Wednesday, while Ball came with $1 billion of 10-year bullet notes on Monday. A trader said that in midweek trading, a total of about $430 million of the notes combined were exchanged.

As for the day’s distressed dealings, oil names were trending mostly lower as oil prices declined.

The dip in oil prices came as new data from the Energy Information Administration showed that crude oil stockpiles declined yet again. For the week ended June 19, inventories fell by 4.9 million barrels –more than the expected 2.3 million draw forecast by analysts surveyed by the Wall Street Journal.

However, there was an unexpected gain in refined products and crude production overall was up for the week.

West Texas Intermediate crude lost 76 cents, or 1.25%, to $60.25 a barrel. Brent crude dropped 88 cents, or 1.31%, to $63.57.

In oil and gas bonds, Swift Energy Co.’s 7 1/8% notes due 2017 ended down 2 points to 58, according to a trader.

But he deemed the 8 7/8% notes due 2020 unchanged at 42.

The Houston-based company was slated to launch a $640 million five-year first-lien term loan on Wednesday.

Vantage Drilling Co. was meantime mixed as well, following a rating downgrade from Standard & Poor’s on Tuesday.

A trader said the 7½% notes due 2019 fell nearly a point to 63½, as the 7 1/8% notes due 2023 moved up “a point and change” to 62¼.

S&P cut the company and its debt to CCC from B- on Tuesday, citing news the company had hired Lazard Freres & Co. to review its financial and strategic options.

In SandRidge Energy Inc. paper, two markets sources called the 7½% notes due 2021 off 1½ points at 46.

Away from oil and gas, the market was mostly softer, with a few bright spots.

After falling 3 to 4 points on Tuesday, Verso Paper Corp. tried to rebound. The 11¾% notes due 2019 improved half a point to 60 3/8, according to a trader.

Also higher were Alpha Natural Resources Inc.’s 6¼% notes due 2021, which ticked up a quarter-point to 7¼.

On the other hand, iHeartCommunications Inc.’s bonds remained under pressure.

A trader saw the 14% notes due 2021 slipping half a point to 74½. The 10% notes due 2018 dropped a full point to 84¾.

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