Distressed energy down on oil drop; Ensco, Intelsat up; Community Health continues climb

By Colin Hanner

Chicago, Dec. 6 – Oil retreated for the first time since the Organization of Petroleum Exporting Countries reached a supply cut agreement last Wednesday, bringing with it several distressed bonds during Tuesday’s session.

Oil came off its highest levels in more than a year on Tuesday, fueled by speculation on not only how supply cuts will be implemented under the new Organization of Petroleum Exporting Countries accord, but on whether non-OPEC countries will agree to cuts during meetings later this week, as well as crude output figures for the month of November.

In the distressed arena, California Resources Corp.’ 8% notes due 2022 were down ½ point to 88, a trader said.

Plano, Texas-based petroleum and natural gas explorer Denbury Resources’ 4 5/8% notes due 2023 were down ½ point to 81¼.

Memorial Production Partners LP, an oil and natural gas explorer and developer, saw a 2-point decrease in its7 5/8% notes due 2021, which settled with a 42 handle, a trader said.

Ensco plc announced it will privately exchange outstanding notes for a new issue, prompting increases in several of the company’s bonds.

For the third-straight session, Community Health Systems Corp. saw gains in several of its distressed notes.

“[Community Health] continues to go onward and upward,” a trader said.

Mirroring the upward trends was Intelsat SA, which, a day after it agreed to exchange three sets of senior notes for a new issue bond, continued to see gains.

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