Distressed oil and gas names trade mixed; PDVSA improves; Peabody debt gains

By Stephanie N. Rotondo

Seattle, Aug. 23 – The distressed debt market again zeroed in on oil and gas debt as oil prices remained firm on Tuesday.

Domestic crude oil rose 1.18% to $47.97 a barrel.

But while the commodity’s price gained, distressed energy bonds were mixed on the day.

A trader said EP Energy Corp.’s 9 3/8% notes due 2020 slipped a quarter-point to 65¾. That trader also saw MEG Energy Corp.’s 6 3/8% notes due 2023 falling a touch to 78¾.

California Resources Corp.’s 8% second-lien notes due 2022 were meantime steady at 67¾.

Among emerging market names, Petróleos de Venezuela SA’s bonds were pushing up, though on no fresh news.

The company said back in July that it was working on a debt swap for debt coming due in 2017. Barring such a deal, the company will have to pay about $2.3 billion in amortization for said bonds.

The state-owned oil company is not, however, said to be looking at an exchange for its 2016 maturities.

A trader said the 5 7/8% notes due 2027 added almost a point to close at 37, while the 6% notes due 2026 gained under half a point to finish at 37½.

The 5¼% notes due 2017 improved a point to 70, the trader said.

Elsewhere in the energy realm, bankrupt coal producer Peabody Energy Corp. saw its debt “up a good bit,” according to a trader.

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