Nabors, Occidental, Baytex, Ensign notes trade up; Chesapeake Energy active; CBL softens

By Cristal Cody

Tupelo, Miss., Jan. 14 – Energy bonds climbed in distressed secondary trading on Thursday in tandem with stronger oil prices.

“Energy is going up,” a market source said. “At the end of the day, in the energy market, supply is hard to come by for distressed investors.”

Oil and gas drilling contractor Nabors Industries Ltd.’s 7½% notes due 2028 (Caa1/CCC+) traded up 2½ points to 80 bid.

Occidental Petroleum Corp.’s 4 5/8% senior notes due 2045 (Ba2/BB-) climbed more than 2 points to trade better than 93¾ bid, yielding over 5%.

Oil futures jumped after softening in the prior session.

North Sea Brent crude oil futures for March deliveries rose 36 cents to settle at $56.42 a barrel.

West Texas intermediate crude oil for February delivery added 66 cents to $53.57 a barrel.

Canadian energy companies also were higher in secondary trading during the session, a market source said.

Calgary, Alta.-based oil and gas explorer Baytex Energy Corp.’s 8¾% senior notes due 2027 (B3/B+) rose more than 3½ points to 77 bid.

The 9¼% senior notes due 2024 (Caa2/CCC+) from Calgary, Alta.-based oilfield servicer Ensign Energy Services, Inc. rose 3½ points to 71¼ bid on Thursday.

Meanwhile, some energy names traded softer on the day.

Rio Energy International, Inc.’s 6 7/8% notes due 2025 declined nearly 2 points to 66 bid, a source said.

Chesapeake eyed

Chesapeake Energy Corp.’s distressed notes softened about 1 to 2 points in light trading Thursday after the company’s plan to exit bankruptcy was approved on Wednesday, sources report.

The Chapter 11 bankruptcy case was filed on June 28 before the U.S. Bankruptcy Court for the Southern District of Texas.

The company had reported it planned to eliminate about $7 billion of debt under the reorganization.

Chesapeake Energy’s 8% senior notes due 2027 declined 1¾ points early in the day to 4¾ bid, a source said.

The issue traded over the day at 4½ to 5½, another source said.

The company’s 11½% senior secured second-lien notes due 2025 attracted foreign interest during the session, one source noted.

The 11½% notes have been trading in the mid-20s range and were quoted Thursday trading in the 27 to 29 bid area.

“The 11½% Reg S were more active than the 144As,” the source added.

Of Rule 144A trading, there was only one print between two dealers at 25¾ bid, while Regulation S trading in the notes saw numerous dealers and electronic trades with the issue down about 1 point on the day at 28 bid, according to the market source.

Bankrupt names active

Meanwhile, CBL & Associates LP’s distressed paper was heavily traded on Wednesday and Thursday, a market source said.

CBL and 176 affiliated companies filed for Chapter 11 bankruptcy on Nov. 1 and Nov. 2.

The real estate investment trust’s 5.95% notes due 2026 softened more than 1 point to 37¼ bid.

In other distressed trading, the 7¾% notes due 2024 from SESI, LLC, a subsidiary of Superior Energy Services Inc., which filed for Chapter 11 bankruptcy in December, jumped 4 points on Thursday, according to a market source.

The 7¾% notes due 2024 headed out at 36 bid after softening ½ point on Wednesday.

Looking at the distressed car rental space, Hertz Corp.’s 5½% notes due 2024 added ½ point over the day to 54¼ bid, a source said.

The 5½% notes are up ¾ point since the start of the year. Hertz filed for Chapter 11 protection in May.

Envision heads up

Market tone was soft over the day with stock indices down marginally following the U.S. House of Representatives’ impeachment on Wednesday of president Donald Trump for inciting the U.S. Capitol riot.

The iShares iBoxx High Yield Corporate Bond ETF edged down 2 cents, or 0.2%, to $87.25 on Thursday.

The S&P U.S. High Yield Corporate Distressed Bond index finished Wednesday up 0.39%, bringing the month- and year-to-date total return to 4.41%.

In other trading, the health care space saw some gains, too, on Thursday, according to a market source.

Envision Healthcare Corp.’s 8¾% senior notes due 2026 (Ca/CC) headed up 2¼ points in the secondary market to 65¼ bid.

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