Chesapeake gains on debt buyback news; WebMD jumps after guiding Q1 revenue upward

By Rebecca Melvin

New York, Feb. 24 – Chesapeake Energy Corp.’s convertibles traded up on Wednesday along with a gain in the underlying shares of the Oklahoma City-based energy company after fourth-quarter results came in a little better-than-expected and the company announced debt buybacks, including buybacks of convertibles.

Not only did the company announce it had bought back bonds, but it also said it plans to pay the upcoming maturities with cash on hand, a New York-based convertibles analyst said.

The debt-strapped company, which has been struggling to remain afloat as the period of depressed commodity prices lengthens, cut debt by $2.2 billion.

Chesapeake has been a focus of the market, and its 2.5% convertibles moved up about 10 points in active trade on Wednesday.

The convertibles energy space overall was weaker as oil prices struggled and weighed on equities for much of the session. Crude oil prices were initially trading lower again on Wednesday, but they closed better – with equities matching the turnaround.

West Texas Intermediate crude for April delivery added 34 cents, or 1% to $32.21 a barrel on the New York Mercantile Exchange.

Elsewhere, WebMD Health Corp.’s convertibles were higher as shares of the Elmwood Park, N.J.-based provider of online medical information jumped 10% on quarterly revenue that beat estimates. The company also guided first-quarter revenue above consensus. WebMD’s 1.5% convertibles due 2020 traded up to 126, which was up from 117 to 119 previously, according to Trace data.

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