Energy gains in distressed debt market; L Brands up on store closures; U.S. Steel drops

By Abigail W. Adams

Portland, Me., May 21 – The distressed debt space was active and marginally improved on Thursday with distressed energy credits leading the way.

However, the activity was largely one-sided with plenty of bids in the market but few offers as the high-yield new issue calendar continued to detract from secondary activity, a source said.

Energy names remained in focus with several credits continuing to post gains as crude oil futures extended their rally.

Paper from Denbury Resources Inc., Whiting Petroleum Corp. and Transocean Ltd. was on the rise.

In the retail sector, L Brands, Inc.’s senior notes jumped as the company announced plans to shutter hundreds of its Victoria’s Secret stores.

United States Steel Corp.’s unsecured notes were trading off as the company prepped an offering of secured notes.

Distressed energy credits continued to gain on Thursday as crude oil futures continued their upward momentum.

Denbury Resources’ 9¼% senior notes due 2022 rose another 2 points to 33 on Thursday, according to a market source. The notes were up about 4 points on the week.

Meanwhile, L Brands’ 6¾% senior notes due 2036 gained 5 points to 76, according to a market source.

The 5¼% senior notes due 2028 jumped 5 points to 79½.

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