Convertible debt trades lower; Chesapeake Energy retreats; SunEdison lining up DIP loan

By Stephanie N. Rotondo

Seattle, March 22 – Trading in the convertible bond market was picking up a bit in Tuesday trading.

However, the space was trending downward, in line with the broader markets. The weakness came as Belgium dealt with a string of bombings in Brussels.

The bombings – two of which occurred at the airport and another at a subway station, both during morning rush hour – were attributed to the recent arrest of Salah Abdeslam, a suspect in the massive attacks on Paris last year. The Islamic State took credit for the attacks.

As the markets came in, so were oil prices. The flight to safer havens such as gold was also due in part to Libya stating that it would not participate in an upcoming OPEC meeting to discuss production freezes.

In response, Chesapeake Energy Corp.’s 2.5% convertible notes due 2037 were trading off 2 to 3 points, according to a market source.

The notes were pegged in a 75 to 76 context early in the session but came in even more to close at 73 bid, 73.25 offered.

That compared to levels around 75 at the open, which was off from Monday’s closing price around 78.

The 2.25% convertible notes due 2038 were meantime about unchanged, trading around 45.375.

The Oklahoma City-based oil and gas producer’s equity was down 6 cents, or 1.23%, at $4.82.

SunEdison seeks DIP loan

SunEdison Inc.’s 3.375% convertible notes due 2025 dropped on Tuesday as it was reported that the struggling solar company was in talks with holders of its second-lien loans to fund a debtor-in-possession facility.

A market source saw the issue at 4 bid, 4.125 offered, down from 8.5 at the open.

The stock meantime fell 52 cents, or 25.87%, to $1.49.

SunEdison is reportedly looking for a $300 million DIP loan. Its efforts to secure such a facility indicate that attempts to restructure its nearly $2.4 billion in debt out of court may have failed.

Last week, the company also delayed filing its latest quarterly report, for the second time. The company attributed the delay to issues associated with its new IT system.

Mentioned in this article:

Chesapeake Energy Corp. NYSE: CHK

SunEdison Inc. NYSE: SUNE

© 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.