Oil rally lifts energy debt; Arch Coal active, mixed ahead of earnings; Peabody numbers on tap

By Stephanie N. Rotondo

Phoenix, April 20 – Distressed energy names were benefiting from yet another rise in oil prices on Monday.

Still, overall trading was muted.

“It’s a Monday,” a trader said. “They traditionally are not [busy].”

Away from oil and gas, Arch Coal Inc. paper was moving around a little more actively ahead of the company’s earnings release on Tuesday.

One trader deemed the paper unchanged to better, but another said the debt was steady to slightly lower.

Aside from commodities, there were also signs of strength in more consumer-related names.

JCPenney Co. Inc.’s 6 3/8% notes due 2036 were pegged at 76, up a quarter-point, by one trader.

That same trader saw Caesars Entertainment Corp.’s 11¼% notes due 2017 at 74½ – unchanged, he said – and the 9% notes due 2020 at 76¾, up a point.

Oil boosts energy sector

West Texas Intermediate crude improved a bit in Monday trading, as oil services firm Genscape reported a 900,000-barrel draw from the Cushing, Okla., delivery point last week.

The benchmark rose 50 cents to $56.24.

In response, several oil and gas names were inching higher.

A trader saw Halcon Resources Corp.’s 8 7/8% notes due 2021 at 82, up a quarter-point on the day.

The trader also saw Sabine Oil & Gas’ 7½% notes due 2020 at 24¼, which was a gain of over 2 points.

SandRidge Energy Inc.’s 7½% notes due 2023 were meantime called half a point better at 67¾, while the 7½% notes due 2021 rose 1½ points to 71 bid.

Arch busy pre-earnings

With Arch Coal slated to release its latest quarterly results on Tuesday, the company’s debt was seeing some movement.

At one desk, a trader said the 7% notes due 2019 were steady at 22. However, he deemed both the 7¼% notes due 2021 and the 9 7/8% notes due 2019 up half a point, at 22 and 25½, respectively.

At another shop, a trader said the 7% and 7¼% notes were both trading in a 21½ to 22 zip code, “in line with where it had gone out last week.” He also called the 9 7/8% notes “a little bit lower” at 25½.

Analysts are forecasting a narrower loss for the coal producer at 49 cents per share. In the first quarter of 2014, loss per share was 60 cents.

Those analysts are also predicting that revenue will decline about 2% year over year.

Elsewhere in the coal space, Peabody Energy Corp.’s bonds were ending the day mixed.

That company is expected to announce earnings on Thursday.

A trader saw the 6¼% notes due 2021 rising nearly 1½ points to 60 7/8. But the 6½% notes due 2020 drifted down half a point to 62, he said.

© 2015 Prospect News.
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