Chemical bonds gain; First Quantum debt rises on debt reduction plan; oil, gas names climb

By Stephanie N. Rotondo

Phoenix, Oct. 6 – The distressed debt market remained on an upward course in Tuesday trading, though most of investors’ focus continued to be on higher-rated names.

Chemical companies were seen rebounding after spending much of the last couple of weeks under pressure. One trader attributed the recent weakness to Olin Corp.’s pricing of a $1.22 billion two-part senior notes offering last week.

“That really repriced the market,” he said.

Meanwhile, First Quantum Minerals Ltd. got a sizable boost as investors responded to the company’s debt reduction plan. The mining and metals company announced the plan – aimed at reducing debt by $1 billion – late Monday.

In the oil and gas space, bonds were rallying across the board as domestic crude prices jumped up more than 5% on the day. Even Chesapeake Energy Corp. was trending higher, despite a ratings downgrade from Moody’s Investors Service.

The chemical space was also rebounding during Tuesday trading.

A trader saw Tronox Ltd.’s 6 3/8% notes due 2020 inch up to 59¾. Another trader said Tronox’s debt was “better,” seeing the notes trade as low as 57¾, but going out around 61.

“So that’s up like 3 points intraday,” he said.

The second trader speculated that recent weakness among chemical companies was due to Olin’s pricing of a $1.22 billion two-part senior notes offering last week.

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