Distressed oil and gas names strengthen with oil prices; Concordia trades busy, soft

By Stephanie N. Rotondo

Seattle, Oct. 6 – The distressed debt market had a firm tone Thursday, due in part to continued gains in domestic crude oil.

Oil prices broke above the $50 mark as U.S. stockpiles continued to decline and it was reported another informal OPEC meeting was planned.

Though no official agreement is expected, a potential production cut is the topic on the table.

Still, the news has helped the struggling oil and gas sector’s bonds improve.

California Resources Corp.’s 8% second-lien notes due 2022, for instance, were up nearly 4 points, a trader said, seeing the paper at 73.

Denbury Resources Inc.’s 6 3/8% notes due 2021 were also better, rising a deuce to 84.

Another gainer was Chesapeake Energy Corp., as its 6 5/8% notes due 2020 finished half a point higher at 95 bid.

Among offshore drillers, Ensco plc’s 5.2% notes due 2025 firmed a point to 74½ and W&T Offshore Inc.’s 8½% notes due 2019 added over half a point to close at 40 7/8.

While the oil and gas space’s gains helped the distressed space, the notable name of the day was Concordia International Corp.

The Canadian drugmaker saw its bonds taking a dip in the wake of the company’s pricing of $350 million of 9% first-lien senior secured notes due 2022,

A trader said the 9½% notes due 2022 lost 2 points to close at 74¼, while the 7% notes due 2023 dropped over 2 points to 68½.

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