SandRidge Energy under pressure; MolyCorp trades flat after missed payment; coal remains weak

By Stephanie N. Rotondo

Phoenix, June 1 – A distressed debt trader said it was “a rather inauspicious start to the week” Monday, given the limited liquidity.

SandRidge Energy Inc. was the dominating name of the distressed space. Those bonds – including the new $1.25 billion of 8¾% senior secured second-lien notes due 2020 – were coming in, following the trend of oil prices.

Meanwhile, traders saw very little activity in MolyCorp Inc.’s 10% notes due 2020 after the company said it was skipping a payment due Monday. However, one trader said the debt was “certainly quoted a little lower.”

Also in the commodity realm, coal bonds could not catch a break in Monday trading, according to market source.

One trader said Alpha Natural Resources Inc.’s 6% notes due 2019 were off almost 2 points at 13, while Arch Coal Inc.’s 7% notes due 2019 were down 1½ points to 17½.

The trader also remarked that Peabody Energy Corp. was “fading again,” its 6% notes due 2018 falling “almost 4 points” to end at “67 and change.” The 10% notes due 2022 finished nearly a deuce lower at 74¾.

The trader said he believed the latter issue was lower intraday.

At another desk, a trader said, “Coal was down a bit more.”

He pegged the Alpha Natural 6% notes at 13, which he deemed off 2 points.

“Only 13 left to go,” he quipped.

In Peabody paper, he saw the 10% second-lien notes fall to 74 from 76 previously. He also placed the 6% notes with a 67 handle, which was down from a 71 to 72 zip code, he said.

For its part, Peabody said in an 8-K filing on Monday that it was holding meetings with investors and analysts this week.

SandRidge hammered

SandRidge bonds remained weak following the pricing of a $1.25 billion second-lien deal at the end of last week.

One trader said the new issue – which came at par on Thursday – was the most actively traded distressed issue of the day, falling almost a point to 98 3/8.

Among the company’s other issues, the trader said the 7½% notes due 2023 fell 4¾ points to 52¼, as the 8 1/8% notes due 2022 dropped “over 5 points” to 53.

Another market source saw the 7½% notes due 2021 at 57¼ bid, down nearly a point.

But SandRidge wasn’t the only oil and gas name taking a hit during the session.

A trader said Sabine Oil & Gas Corp. – an entity currently working with advisors on a potential debt restructuring – was mostly lower on the day, its 7½% notes due 2020 ending over a point weaker at 22 7/8. The 7¼% notes due 2019 were meantime down a deuce at 23 3/8.

However, the 9¾% notes due 2017 ticked up a quarter-point to 18¼, the trader said.

It appeared the sector was following the trend set by oil prices, which were at least modestly lower on the day.

West Texas Intermediate crude fell a penny to $60.29, while Brent crude dipped 63 cents to $64.93.

MolyCorp misses coupon

Rare earth metals mining company MolyCorp skipped a $32.5 million interest payment on its 10% notes due 2020, the company said in a press release on Monday.

As the company enters into its 30-day grace period, a trader noted that the bonds were trading flat, or without accrued interest.

He saw the paper offered at 44½.

Another trader said “small pieces” were trading at 42½, which he said was down from previous trades, though he was “not sure if that is indicative of the real market.”

As previously reported, the Greenwood Village, Colo.-based company has engaged advisors to help it restructure its debt.

© 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.