Peabody stays strong on heavy volume trading; Basic nearly unchanged despite Chapter 11 filing; Linn gains

By Colin Hanner

Chicago, Oct. 24 – A flurry of heavy volume of trading with Peabody Energy Corp. and news of Chapter 11 in two other energy companies had trading mixed during Monday’s session.

Peabody continued its lively streak at the beginning of the new week and was “very active” again on Monday, according to one trader.

He said the 6½% notes due 2022 traded up 3 points to 75¾, and that the 6½% notes due 2020 were up 2 points to 51 on “heavy volume.”

Another market source had the 6½% notes due 2020 up 2½ points to 52.

The coal company’s 6% notes due 2018 were up 2¼ points to 51¾, and the 6¼% notes due 2021 were up 2 5/8 points to 51 7/8.

Rounding out the company bonds were the 10% unsecured notes due 2022, which were up 4 points to 76, a trader said.

Just as easily as oil increased during Friday’s session due to seemingly strengthening ties between the Organization of Petroleum Exporting Countries on cutting supply, it fell on Monday. Iraq’s Oil Minister Jabber Al-Luaibi announced on Sunday that supply cuts shouldn’t be at the country’s expense.

West Texas Intermediate crude was down 27 cents, or 0.53%, to $50.58.

Brent crude was down 27 cents, or 0.52%, to $51.51.

Speculation about the supply of oil coupled with news of restructuring had Basic Energy Services, Inc. trading during the day without much change.

The company announced that it has agreed to file for Chapter 11 following news that it has entered restructuring support agreements with some holders of its 7¾% notes due 2019 and its 7¾% notes due 2022.

“The sharp and prolonged period of depressed commodity prices have created poor operating conditions in the field and significantly reduced our operating cash flow,” said Rob Patterson, Basic Energy’s president and chief executive officer, in a press release. “The actions we have taken, combined with the support of our existing lenders, will help us strengthen our balance sheet and position Basic for a sustainable future to benefit from what we anticipate will be an eventual recovery in oil and natural gas prices.”

The company intends to exit Chapter 11 before the end of the year.

A trader said the 7¾% notes due 2019 were up “near 54.”

“It was trading in the 40’s the last time it was trading,” the trader said, though he said it had not been trading much.

“Guys have been restricted and tied in that one for a while [and] there’s been no tradable bonds,” a trader said. “With that plan, maybe some people got freed up to trade some and they fed the market a little bit.”

Basic’s stock was down 37 cents, or 51.44%, to 35 cents.

Stone Energy Corp., still reeling from an announcement that they will file for Chapter 11 by Dec. 9 and enter into restructuring support agreements with its holders, was down again after Monday’s session.

A market source said that the company’s 7½% notes due 2022 were down 1 point to 62.

California Resources Corp.’s 8% notes due 2022 were “unchanged” at 74, one trader said. A market source said there was no activity on its several high yields, including its 5% notes due 2020 and its 5½% notes due 2021.

Linn Energy, LLC’s 7¾% notes due 2021 were up 2 to 30½, a market source said, and MEG Energy Corp.’s 7% notes due 2024 were up ½ to 89¾.

Houston-based Memorial Production Partners, an oil and natural gas producer, saw trading on Monday in its 7 5/8% notes due 2021, which traded up 1¼ to 48½, a trader said.

Round up

Concordia International Corp.’s 7¾% notes due 2023 were down ¾ to 62½ during trading, a 2½-point swing from trading on Friday, said a trader.

The company’s chief executive officer Mark L. Thompson resigned on Friday.

Alliance One International, Inc. 9 7/8% notes due 2021 were up ½ to 85, a trader said Monday.

GEO Group Inc. 5 1/8% notes due 2023 were up ½ to 86¼.

Brentwood, Tenn.-based Community Health Systems 6 7/8% due 2022 “were active” but unchanged at 85¾, a market source said.

Intelsat Corp.’s Jackson-linked 7¼% due 2019 was trading around 81, down ½, a market source said.

The company’s Jackson-linked 7¼% notes due 2020 were trading at 76½, the market source said, and another trader said they were down ½ point on the day.

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