Distressed energy space better as OPEC reaches production deal; Community Health bonds up

By Stephanie N. Rotondo

Seattle, Sept. 28 – The distressed debt market improved in midweek trading, due in large part to gains seen in the energy sector.

The gains came as it was reported that OPEC had reached a deal to limit production for the first time since 2008. The decision came as members of the cartel held an informal meeting in Algeria.

Though details have not been decided, OPEC members agreed to cut total production to 32.5 million barrels per day.

Currently, the organization is pumping a total of 33.24 million bpd.

The news resulted in an over 5% improvement in domestic crude prices, which closed at $46.98 a barrel. That boosted distressed oil and gas names.

California Resources Corp.’s 8% second-lien notes due 2022, for instance, were “up smartly,” a trader said, seeing the issue adding over 2 points to close at 66.

Whiting Petroleum Corp. was another gainer, as its 6¼% notes due 2023 rose 1½ points to 89, according to a trader.

In Chesapeake Energy Corp., a trader said the 4 7/8% notes due 2022 were nearly 1½ points higher at 82.

A trader said Community Health Systems Inc. bonds “rallied” on Wednesday, as the company said “they would rather sell themselves as a whole” rather than piece by piece.

In response, the 6 7/8% notes due 2022 gained “almost 1½ points” to close at 85. The 7 1/8% notes due 2020 traded up nearly 2 points to 92 7/8.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.