Primary remains dormant; California Resources, Whiting drop; funds lose $829 million

By Paul A. Harris and Abigail W. Adams

Portland, Me., Dec. 6 – The domestic primary market remained dormant on Thursday and may remain so for the remainder of the year with optimism diminishing about new issue activity in the run up to the holidays.

Meanwhile, the secondary space was volatile with most names trading down early in the session but paring their losses in the afternoon, a market source said.

The energy sector remained under pressure with few answers regarding future production levels following the closely watched OPEC meeting on Thursday in Vienna.

California Resources Corp.’s 8% senior notes due 2022 continued to be the most actively traded issue in the secondary space with the notes dropping 3 points in the high-volume activity as crude oil futures resumed their downward momentum.

Whiting Petroleum Corp.’s 6 5/8% senior notes due 2026 were second only to California Resources in trading activity with the notes also on the decline.

While the notes were largely trading sideways, Tesla Inc.’s 5.3% convertible notes due 2025 were among the volume movers on Thursday.

Meanwhile, high-yield mutual funds and exchange-traded funds – considered a reliable barometer of overall liquidity trends in the junk market – marked their third consecutive week of outflows.

Funds saw outflows of $829 million for the week ended Dec. 6, according to fund-flow statistics generated by AMG Data Services Inc.

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