SandRidge, Energy XXI improve ahead of earnings; Magnetation trading flat after Chapter 11

By Stephanie N. Rotondo

Phoenix, May 5 – The distressed debt market held in during Tuesday trading, though the broader markets were in sell-off mode.

Treasuries and stocks were coming in as investors reacted poorly to weak first quarter GDP data.

Distressed investors remained focused on commodities, especially those that are slated to bring earnings later in the week.

Take, for instance, SandRidge Energy Inc., which will put out its earnings after the market closes on Wednesday. Market sources saw that company’s debt rising ahead of the numbers.

Energy XXI is also scheduled to release earnings, expected on Thursday. That paper was also moving higher on the day.

The bonds might have also been benefiting from a rally in oil prices. West Texas Intermediate crude jumped $1.81, or 3.07%, to $60.74 per barrel. Brent crude finished $1.21, or 1.82%, higher at $67.66.

The gains were attributed to protests at Libya’s eastern port that blocked any oil tankers from leaving, as well as word that Saudi Arabia has increased the price of Arab light grade crude to U.S. and Northwest European customers.

Magnetation LLC’s 11% notes due 2018 began trading flat, or without accrued interest, on Tuesday after the company said it had filed for Chapter 11 protections.

A trader said the debt rose to levels in the mid-30s, though he noted that there was “not a lot of volume.”

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