Distressed bonds softer amid limited liquidity; commodities mostly weak as oil retreats again

By Stephanie N. Rotondo

Phoenix, March 19 – The distressed debt market waned a bit Thursday, as oil prices were once again in retreat.

However, liquidity was thin across the board, though the focus continued to be on commodities, especially oil and gas.

West Texas Intermediate crude closed down a buck, or 2.24%, to $43.66 a barrel, while Brent crude dropped $1.52, or 2.72%, to $54.39.

Comstock Resources Inc.’s 7¾% notes due 2019 closed at 37¼, “down 5 points from two days ago,” a trader said.

EXCO Resources Inc.’s 7½% notes due 2018 meantime dropped 4½ points to 57½.

“A delayed reaction to oil, maybe?” the trader pondered of the large losses.

Also in the oil space, a trader saw Linn Energy LLC’s 6¼% notes due 2019 were seen falling 1¼ points to 78. Another market source pegged the 7¾% notes due 2021 at 76¾ bid, down a point.

Swift Energy Co.’s 7 7/8% notes due 2022 lost over a point to finish at 39.

Among recently topical oil names, Sabine Oil & Gas Corp.’s 7½% notes due 2020 managed to end a touch higher at 15½.

Earlier in the week, Sabine said it had hired Lazard Ltd. and Kirkland & Ellis LLP to review its capital structure, while also delaying its latest 10-K filing.

Quicksilver Resources Inc. – which filed for bankruptcy on Tuesday – was also firmer, as a trader saw the 7 1/8% notes due 2016 inch up almost half of a point to 1 7/8. However, the 11% notes due 2021 fell by the same amount to 17 1/8.

Elsewhere in the commodity arena, Arch Coal Inc.’s 7¼% notes due 2021 closed a point lower at 23½.

MolyCorp Inc.’s 10% notes due 2020 – another topical name after the company said its auditor had raised concerns about its ability to continue – saw an over 4½-point bump, ending at 52 1/8.

Away from commodities, Getty Images Inc.’s 7% notes due 2020 put on 3¼ points to finish at 50½.

Claire’s Stores Inc.’s 8 7/8% notes due 2019 closed just under half a point weaker at 62.

Claire’s released its quarterly results late Tuesday and held a conference call on Wednesday.

For the fourth quarter, Claire’s posted net sales of $412.4 million, down 5.3% from the previous year.

The decline was attributed in part to lower same-store sales and fewer open stores.

Consolidated same-store sales dropped 2.3%, with North American sales slipping 1.5% and Europe sales losing 3.8%.

Adjusted EBITDA was $84.7 million, compared to $95.7 million in the fourth quarter of 2013.

For fiscal 2014, net sales came to $1.5 billion, off 1.3% from fiscal 2013. Consolidated same-store sales weakened 2.2%, accounting for a 2.9% decline in North America and 1.2% in Europe.

Adjusted EBITDA was $248 million, down from $268.8 million the year before.

© 2015 Prospect News.
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