Distressed debt remains strong post-Fed decision; California Resources improves with oil

By Stephanie N. Rotondo

Seattle, Sept. 22 – Distressed bonds continued to gain strength on Thursday, just one day after the Federal Reserve opted to keep interest rates steady.

Additionally, a weakening dollar, combined with positive crude inventory data on Wednesday, helped domestic crude oil prices push higher once again.

Crude rose 1.7% to $46.11 a barrel.

With the rise in oil, California Resources Corp.’s 8% second-lien notes due 2022 added over a point to close at 65¾.

The U.S. Energy Information Administration announced on Wednesday a third consecutive decline in inventories. Last week, crude stockpiles declined by 6.2 million barrels. That compared to a 3.4 million-barrel increase forecast by analysts polled by Reuters.

Among recently topical names, Community Health Systems Inc.’s 6 7/8% notes due 2022 improved almost half a point, according to a trader, continuing the rollercoaster the name has been on since Friday.

The trader placed the issue at 84.

On Friday, it was reported that the hospital operator had hired financial advisers to look into its options. That resulted in a string of losses through Tuesday’s session.

Also in the healthcare arena, Concordia International Corp. – another name that has been on a ride of late – saw its 9½% notes due 2022 gaining almost a point to close at 69¾.

The Canadian drugmaker’s debt has gyrated since last week, when the United Kingdom proposed a bill that would stem hefty drug price increases.

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