Energy names fall as crude stockpiles grow; Denbury Resources off on bond swap, downgrade

By Paul Deckelman

New York, May 4 – The beleaguered bonds of oil and natural gas companies were lower on Wednesday amid mixed crude oil prices against a backdrop of continually rising crude oil stockpiles.

The U.S. Energy Information Administration reported that crude oil stockpiles increased to new record levels last week, rising by 2.8 million barrels in the week ended Friday.

That put inventories at 543.4 million barrels, or about 1 million barrels more than analysts had anticipated.

In the junk bond market, names such as Chesapeake Energy Corp., Continental Resources, Inc., Freeport-McMoRan Inc. and California Resources Corp. were seen on the downside.

Chesapeake’s convertible notes were also off, in line with a fall in its stock prices.

Another oiler, Denbury Resources Inc., was also down. Besides the impact of lower oil prices, the company announced a private agreement with some of its bondholders to exchange their existing paper for a lesser face amount of new second-lien notes, causing S&P to cut its ratings.

On the upside, iHeartMedia Inc.’s bonds strengthened after the broadcasting and outdoor advertising company reported better-than-expected first-quarter numbers.

In the bank debt market, iHeart’s term loan D was also seen to have strengthened by a few points on those quarterly results.

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