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Distressed bond market ends heavy; SandRidge notes stay busy, weak; Community Choice debt down
By Stephanie N. Rotondo
Phoenix, May 18 – It was a down day for the distressed debt market, much as it initially was for the broader markets.
But while the broader markets managed to end with a firm tone, the distressed space had no such luck.
SandRidge Energy Inc. remained an active name, as investors continued to react to news from last week regarding a private debt-for-equity swap.
While that news was initially taken well, since then the bonds have been under pressure.
One trader saw the 7½% notes due 2021 decline over 2 points to 65 3/8, while the 7½% notes due 2023 dropped 4½ points to 62¾.
Another market source pegged the 2021 paper at 65½ bid, off over 4 points on the day.
On Thursday, the Oklahoma City-based oil and gas producer said it had swapped $29 million of the 2021 notes for just over 16.3 million common shares and another $21 million of the 2022 notes for about 11.63 million shares.
Following that news, Standard & Poor’s cut its rating on the company to CCC+ from B and on its senior notes to CCC from B-.
Elsewhere in the oil and gas sector, a trader dubbed Key Energy Services Inc.’s 6¾% notes due 2021 “the most actively traded bond in distressed.”
He said the notes fell “almost a point” to end around 70.
Energy XXI’s 8¼% notes due 2018 were meantime a point weaker at 71½.
Community Choice falters
Community Choice Financial Inc. is slated to hold a quarterly conference call on Tuesday to discuss its latest results.
Ahead of the call, the Dublin, Ohio-based bank’s 10¾% notes due 2021 were taking hits, according to a trader.
The trader pegged the bonds at 52½, down 3½ points.
Community Choice filed its 10-K with the Securities and Exchange Commission on Wednesday. According to that regulatory filing, total revenues improved from the previous quarter, due in part to a gain in credit service and card fees.
Revenue was $136.43 million, up from $119.9 million the previous quarter.
Net income, however, was slightly lower at $6.44 million, versus $6.74 million.
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