Distressed bonds see subdued volume in post-holiday session; oil and gas names in focus

By Stephanie N. Rotondo

Phoenix, Jan. 2 – Activity in the distressed debt arena was very limited in post-holiday trading on Friday.

“There was not more than half a dozen trades in anything,” a trader said of the first session of 2015.

Investors were, however, continuing to eyeball the oil and gas space, especially as oil prices hit new five-and-a-half-year lows on increased production in Russia and Iraq.

West Texas Intermediate crude fell 61 cents, or 1.15%, to $52.66 per barrel. Brent Crude declined 97 cents, or 1.69%, to $56.36 per barrel.

Midstates Petroleum’s bonds were mixed on the day, according to one trader.

The trader saw the 10¾% notes due 2020 rising 2 points to 52½. He noted that the paper hadn’t traded in “a week or more.”

The 9¼% notes due 2021 were meantime off 1¼ points, he said, at 50.

Another source pegged the 10¾% notes at 52½, deeming that level down 2 points from before Christmas. The 9¼% notes were seen at 49¾, off 2 to 2½ points in that same time period.

SandRidge Energy Inc.’s debt was also trading in mixed fashion, according to a market source.

At one desk, the 7½% notes due 2023 were called over a point weaker at 61¾. At a second desk, the 7½% notes due 2021 were placed at 64¼ bid, down nearly 3 points.

A third source called the 2021 issue up half a point at 63½, while the 2023 maturity was just over a point lower at 61¾.

Among other oil names, a trader said Goodrich Petroleum Corp.’s 8 7/8% notes due 2019 hadn’t traded since the end of December, when it was in a 49 to 49½ context.

Another source saw only odd-lot trading in the issue, in a range of 49 to 50.

That was about in line with where it had been, the source said.

While distressed oil and gas bonds were mixed during trading, the sector’s preferreds were trending upward.

Vanguard Natural Resources LLC’s 7.625% series B cumulative redeemable preferred units (Nasdaq: VNRBP) finished up 78 cents, or 4.04%, at $20.19. Goodrich Petroleum’s 9.75% series D cumulative preferreds (NYSE: GDPPD) improved 47 cents, or 5.93%, to $8.40.

© 2015 Prospect News.
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