Navistar bonds dip on profit taking; Intelsat continues to climb; oil and gas names firm with crude prices

By Stephanie N. Rotondo

Seattle, Sept. 7 – The distressed bond market had a slightly firmer tone on Wednesday, though traders noted that most of the day’s activity was centered on new high-yield issues and higher quality paper.

“There was really little in truly distressed stuff,” a trader said.

Navistar International Corp. bonds – which rose 15 points in the previous session on news Volkswagen was taking an equity stake in the company – came in a little during the midweek session.

“They gave back a little,” a trader said of the 8¼% notes due 2020, seeing the debt trade with a 97 handle. He added that the 1-point decline was “probably” due to profit taking.

Another trader said there were “a bunch of trades again today” in the issue, which he saw drifting down half a point to 97¼.

Intelsat SA debt meantime traded up with the market, though a trader remarked that the name was “not overly active.”

“They continue to creep up,” the trader said, deeming the 7¼% notes due 2020 “up a little bit” at 78¾ bid, 79 offered.

Another trader pegged that issue at 78¾, a gain of a quarter-point on the day. The trader also saw the 7½% notes due 2021 rise a similar amount to 75¾.

Oil and gas powers up

Crude oil prices got a boost on Wednesday, which helped the struggling oil and gas arena gain ground – or at least hold steady.

A trader said EP Energy Corp.’s 9 3/8% notes due 2020 were unchanged at 65, though Whiting Petroleum Corp.’s 5% notes due 2019 added a point to close at 92½.

MEG Energy Corp.’s 7% notes due 2024 were meantime modestly higher, gaining a quarter-point to finish at 79¾.

And, Legacy Reserves LP’s 6 5/8% notes due 2021 climbed up over a point to 50¼, according to a trader.

Domestic crude oil prices were nearly 3% better day over day, as rumors of refinery outages and slowdowns circulated.

The possibility that OPEC could reach some sort of production deal at an informal meeting later this month was also helping the commodity improve.

Oil closed at $46.78 a barrel.

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