Distressed energy bonds lead market downward; Toys ‘R’ Us improves on forecast news

By Stephanie N. Rotondo

Seattle, Feb. 2 – The distressed bond market “got shot to hell,” a trader said Tuesday, as the broader markets fell in tandem with declining oil prices.

Further pressuring the markets were fresh earnings from oil giants Exxon Mobil and BP plc. Such larger oil producers have been holding up better than their sector peers as oil prices have plummeted, but the latest quarterly results showed a $3.3 billion loss for BP and a 58% decline in profit for Exxon.

Domestic crude oil fell 5.34% on Tuesday, ending sub-$30 a barrel.

Oil’s decline and the weak earnings from BP and Exxon didn’t do much to help distressed oil producers either.

A trader said Energy Transfer Partners LP’s 5 7/8% notes due 2024 lost 2¼ points, ending at 74¼. EP Energy Corp.’s 9 3/8% notes due 2020 were meantime off 4 points to 38.

In Whiting Petroleum Corp. paper, the 5% notes due 2019 weakened 4½ points to 60½, as the 6¼% notes due 2023 dropped 2½ points to 59.

Energy XXI Ltd. saw its debt losing ground as well. The 7½% notes due 2021 slipped nearly a point to 3. The 9¼% notes due 2017 also closed a 3, a decline of 3 points.

While the distressed space was trending lower, Toys “R” Us Inc.’s debt improved significantly after the company released higher expectations for its fiscal year and said it was working with advisers to deal with its capital structure.

© 2015 Prospect News.
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