Peabody finishes week on strong note; Stone mostly unchanged on restructuring agreement; Concordia loses CEO

By Colin Hanner

Chicago, Oct. 21 – The end of the week in distressed debt was capped off by strong signals coming out of the oil sector and reports, stemming out of two of its most notable energy movers.

Peabody Energy Corp., which was a “smidge softer” in Thursday’s trading, rebounded on Friday even in the wake of the company’s monthly operating report.

“It was the mover of the day,” one trader said.

The St. Louis-based coal company posted a $2.9 million operating loss last month on $443 million in total revenue.

Cash and cash equivalents decreased by $145.8 million during the month, driven largely by the company's final required payment of $158.7 million under its current Federal coal lease obligations in the Powder River Basin, partially offset by $30.8 million of cash flows provided by operating activities, the company said in an 8-K filing.

Its 6¼% notes due 2021 traded up 2½ to 46½ on “$26 million” volume, a trader said. The 6% notes due 2018 traded more actively, with a “$50 million volume,” and rose 5¼ to 49.

A market source said the 6½% notes due 2020 were up “5 points to 48 on a lot of trades,” and another source had the notes up 6 to 49½.

Two traders said they saw no activity with Stone Energy Corp. after the company announced Friday that it had settled on a restructuring support agreement with some holders of its notes, including the 7½% senior notes due 2022.

The oil and gas company out of Lafayette, La., saw its stock drop more than a third during the day’s session. It finished the day down $3.39, or 34.98%, at $6.30.

Although the stock move suggests the ominous news came rather suddenly out of the gate for Stone, the company warned at the beginning of August that it may need to file for Chapter 11.

Meanwhile oil saw growth factors that led to another surge in crude prices.

The number of active oil rigs rose again for the week ending Oct. 21, extending the streak to over four months.

The latest report showed 11 new U.S. oil rigs were added, the first time in two months that oil rigs increased by double digits.

As speculation continues to swirl around the Organization of Petroleum Exporting Countries’ decision on cuts to limit output soon, Russian energy minister Alexander Novak said his country’s production could be curtailed after discussions with OPEC, backing up previous statements by president Vladimir Putin.

West Texas Intermediate crude was up $0.24, or 0.47%, to $50.87 a barrel.

Brent crude was up $0.42, or 0.82%, to $51.80.

The petroleum and natural gas exploration and production company Denbury Resources Inc. was a gainer for the day and was up 1 to 86¾.

Chesapeake Energy Corp.’s 6 5/8% notes due 2020 were up ¾ to 97½, and Linn Energy, LLC’s 7¾% notes due 2021 were up ¼ to 28½.

Oil sands producer MEG Energy Corp.’s 7% notes due 2024 were down ½ to 89¼. The Calgary, Alta.-based company will announce its third quarter earnings on Thursday.

In other news

Concordia International Corp. saw increases in its high-yield notes, particularly the 7¾% notes due 2023, which were up 1¾ to 63¼, a market source said.

The company’s chief executive officer Mark L. Thompson resigned on Friday. Per Concordia’s website, Thompson was also a founder, director and chairman of the company.

A search for a new CEO has started.

The Santa Clara, Calif.-based multinational technology company Avaya Inc.’s 7% notes due 2019 traded up 3/8 to 82¾, a market source said.

Valeant Pharmaceuticals Inc. was active yet again during Friday’s session. A trader said that the company’s 6 1/8% notes due 2025 traded down ¾ to 82 5/8, and the 5 7/8% notes due 2023 traded down 7/8 to 82 7/8.

Bristow Group Inc., an industrial aviation service based in Houston, saw movement in its 6¼% notes due 2022, which traded up 1 point to 81¼, a market source said.

Intelsat Corp.’s Jackson-linked 7½% notes due 2019 was one of the day’s big losers in high yield, down 1¼ to 81½.

99 Cents Only Stores, not often traded, per one market source, were active on Friday. Its 11% notes due 2019 traded up ¼ to 59.

GEO Group, Inc., a rehabilitation company for offenders in-and-out of custody, grew ½ as its 5 1/8% notes due 2023 rose to 85¾.

© 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.