Ultra Petroleum gets huge gain; Peabody rallies on commodity momentum; oil mixed

By Colin Hanner

Chicago, Nov. 22 – Movement in some oil and metals contributed to the movement of some bonds in distressed debt-land on Tuesday, with one of those sector-related names coming out of the woodwork to post sizable gains.

Ultra Petroleum Corp. notes were up more than 10 points in one of its notes, coming off a plan support agreement with its shareholders and senior noteholders on Monday.

“Ultra [Petroleum] was trading heavily today,” a trader said. “Otherwise, volumes were falling greatly [in the distressed arena].”

Peabody Energy Corp. rebounded off a string of point-shedding days due to coal concerns. One trader said that Peabody’s sudden rise was due to the momentum generated by the overall rise in commodities on Tuesday, as well as comments made by president-elect Donald Trump in a video released on Monday.

Oil fluctuated on Tuesday, rising in the morning based on confidence in the Organization of Petroleum Exporting Countries’ ability to reach a consensus supply cut deal, then slipping on fears that Iran and Iraq would not participate in production cuts.

Yet, distressed oil-related notes tended to rise, as oil futures were overall flat on the day.

Denbury Resources Corp. continued to climb, along with MEG Energy Corp. and California Resources Corp., whereas GenOn Energy, Inc. slipped.

Modest gains in healthcare notes – Community Health Services Inc. and Quorum Health Corp. – continued, and pharmaceutical companies, like Valeant Pharmaceuticals International Inc. and Concordia International Corp., had similar upward movement.

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