Trading subdued post-midterm elections; MolyCorp dips ahead of earnings; energy tries to rally

By Stephanie N. Rotondo

Phoenix, Nov. 5 – Trading after the midterm elections was “not overly active,” one distressed debt trader reported.

“I think people are digesting the elections, digesting earnings that are coming out,” he said. And, as the markets have stabilized after the recent volatility, many are “taking the time to sort things out.”

MolyCorp Inc. put out earnings after the bell on Wednesday. Leading up to the numbers, a trader said the company’s bonds were on the weaker side.

In after-market dealings, the company’s equity was taking a sizable hit.

Meanwhile, a trader said that “a lot of those energy names were bouncing back after yesterday’s carnage.” The gains coincided with a gain in oil prices.

Brent crude rose 41 cents to $83.23 a barrel. West Texas Intermediate gained $1.66, or 2.15%, to $78.85.

In the oil and gas realm, Samson Investments Co.’s 9¾% notes due 2020 gained over a point to close at 71. Halcon Resources Corp., however, closed mixed, with the 9¾% notes due 2020 rising nearly a point to 80½ and the 8 7/8% notes due 2021 falling almost half a point to 77¼.

Quicksilver Resources Inc. was also mixed. A trader said the 9 1/8% notes due 2018 closed at 50, down 1½ points, as the 11% notes due 2021 put on 3 points to end at 52.

In the coal sector, Walter Energy Inc.’s 9 7/8% notes due 2020 were seen up over a point at 30½.

In Arch Coal Inc. debt, the bonds were called unchanged to weaker by one trader.

He said the 7¼% notes due 2020 and 2021 were both steady, at 49 and 38½, respectively. But the 9 7/8% notes due 2019 fell almost a point to 45¾.

Alpha Natural Resources Inc. paper was meantime unchanged to slightly better, the trader said. The 6¼% notes due 2021 finished half a point higher at 46½, as the 6% notes due 2019 held in at 50.

MolyCorp weak ahead of numbers

MolyCorp’s 10% notes due 2020 ended the day off nearly half a point at 71 5/8, according to a trader.

Another trader saw the issue trading in a 71 to 72 context prior to the company’s after-market earnings release.

“There’s no reaction yet,” the trader said of the bonds’ movement post-numbers. However, “I know the stock is trading down a bunch after-market.”

The stock (NYSE: MCP) closed the session up 4 cents, or 2.92%, at $1.41. In after-market dealings, however, the issue was seen down 26 cents, or 18.44%, to $1.15.

For the quarter, the Greenwood Village, Colo.-based rare-earth metals mining company posted consolidated net revenues of $123.9 million, a 6% increase from the second quarter. Sales volume meantime increased by 12% to 3,356 metric tons.

However, the average selling price fell to $36.93 per kilogram, a 5% decline quarter over quarter.

Net loss was $105.2 million, or 47 cents per share. On an adjusted basis, the loss was 40 cents per share.

MolyCorp experienced negative cash flows over the course of the quarter to the tune of $28.2 million. Cash and equivalents was $313.5 million.

Capital expenditures during the quarter came to $18.2 million on a cash basis.

Among other mining names, Cliffs Natural Resources Inc.’s 4 7/8% notes due 2021 inched up slightly to 79¾, while the 4.8% notes due 2020 closed unchanged at 80½, according to a trader.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.