E&P names rally off early morning trend in oil prices; Community Health wraps asset sale

By Colin Hanner

Chicago, Jan. 3 – Activity resumed on the first trading day of the new year on Tuesday, and movement in the distressed arena picked up from its pre-holiday lull, jumpstarted by up-then-down movement in oil future prices and company-specific news.

“We’re not back in the full-swing, but there was a fair amount of activity in high-yield” and distressed, a market trader said, adding that his firm saw $2 billion of activity in the high-yield market.

Distressed exploration and production names were mostly up off the polarizing price of oil on the session, with a majority capitalizing on the run oil futures had heading into morning session. Others pared previous gains when oil dropped to lows toward the end of the day.

California Resources Corp. saw a nearly two-point gain in its most popular distressed securities, though a trader said the upward tick may have come in earlier trading.

Similar circumstances were felt in Linn Energy, LLC, French-based geophysical company CGG SA and MEG Energy Corp., which all reflected a positive session, mirroring the earlier trend in oil.

In healthcare and pharmaceuticals, Community Health Systems, Inc. announced an asset sale, though it did not seem to stir much movement in its distressed notes.

Regularly-mentioned distressed names like iHeartCommunications, Inc. and Intelsat SA saw some diffident activity in both directions, and several one-off names moved on the day.

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