Chesapeake, energy bonds decline as oil prices near $40; Bon-Ton debt falls 20-plus points

By Stephanie N. Rotondo

Seattle, Nov. 19 – Chesapeake Energy Corp. bonds took yet another beating Thursday as oil prices edged closer toward $40 a barrel.

“Chesapeake was getting clobbered,” a trader said, particularly on the short end.

The 7¼% notes due 2018 declined 7¾ points to 57¾, while the 6½% notes due 2017 dropped 8½ points to 74¼, the trader said.

Among the Oklahoma City-based oil and gas company’s other issues, the 5¾% notes due 2023 were deemed “very active,” trading down over 3½ points to 44 3/8. The 6 5/8% notes due 2020 weakened 3 points to 49½, as the 4 7/8% notes due 2022 fell 3½ points to 44.

The 3.57% notes due 2019 closed down nearly 5 points to 46¼, he said.

Another market source pegged the 6 5/8% notes at 49¼ bid, down 5¼ points on the day.

At another shop, a trader said the name was “down a bunch depending on what maturity.” Losses totaled 5 to 10 points, he said, though “they did recover a bit from the lows of the day.”

Meanwhile, the rest of the oil and gas space was also under pressure.

Halcon Resources Corp.’s 8 5/8% notes due 2020 waned almost 3 points to 81¾, according to a trader.

Denbury Resources Inc.’s 6 3/8% notes due 2021 also took a hit, losing over 5 points to end at 63½.

In California Resources Corp. paper, the 5% notes due 2020 waned 2½ points to end at 62¼, while the 6% notes due 2024 dove 4 points to 56¾.

The 5½% notes due 2021 dropped 2¾ points to 58¼.

Bon-Ton nosedives

A trader said Bon-Ton Department Stores Inc.’s 8% notes due 2021 took a massive hit in Thursday trading.

He placed the issue at 33¼, down 27 points from the last round-lot trades done at the end of October.

“I guess they are headed for tough waters,” he said.

A second trader said the paper was “down about 20 points,” falling to the low-30s from the low-50s.

On Thursday, the York, Pa.-based retailer reported its third-quarter results, posting a much wider loss than the year before.

Net loss was $34 million, or $1.72 per share. That compared to a loss of $11 million, or 57 cents per share.

Sales declined 3% to $623.4 million.

Since the beginning of the year, Bon-Ton has lost a total of $107.6 million.

The company said its results were weighed on by unseasonably warm weather, higher markdowns and increased costs from integrating sales.

Bon-Ton said it was looking at ways to reduce its 2016 expenses by $35 million. It also chose to skip its dividend payment of 5 cents.

© 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.