Oil drops below $40, sector debt falls in sympathy; SunEdison, TerraForm bonds decline

By Stephanie N. Rotondo

Seattle, Nov. 20 – The distressed oil and gas space continued to be under pressure Friday as crude oil prices dropped nearly 3% to trade sub-$40 a barrel.

The weakness was due at least in part to a stronger dollar.

Chesapeake Energy Corp. – a name that has been retreating for weeks now – was “getting drummed, but not too bad,” a trader said.

The trader said the 6 5/8% notes due 2020 fell just over a point to 47½, as the 7¼% notes due 2018 weakened just half a point to 58½.

The trader also saw the 4 7/8% notes due 2022 losing 2½ points, closing at 42.

Another market source placed the 6 5/8% notes at 47 bid, down over a deuce.

As has been the case of late, SunEdison Inc.’s convertibles “continued to stay active,” according to a trader.

At mid-afternoon, the trader said that about $20 million of the renewable energy company’s convertibles had traded, all continuing on their downward trajectory.

One of the more active issues was the 2.625% convertible notes due 2023, the trader said. He pegged that issue at 25.

“It came at par in May,” he said of the issue.

Meanwhile, TerraForm Power Inc. – one of SunEdison’s yieldcos – saw its straight bonds trending downward as well.

A trader said the 5 7/8% notes due 2023 slipped almost a point to 68½. The 6 1/8% notes due 2025, however, lost nearly 4 points, ending at 65¾.

© 2015 Prospect News.
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