Peabody reacts to OPEC speculation, oil prices; Linn builds on growth; Freeport-McMoRan posts earnings

By Colin Hanner

Chicago, Oct. 25 – Oil prices fell Tuesday, bringing some distressed oil-linked names down with them, as tables continued to turn in the ongoing discussions with Organization of Petroleum Exporting Countries and whether they would support supply cuts soon.

Peabody Energy Corp. showed signs of slowing down on Tuesday, putting a stop to the growth it’s seen in the past week.

“There were lots of intra-day swings in price in some of [Peabody’s] notes,” a trader said.

The coal and mining company saw its biggest decline in its 6½% notes due 2020, which were down 2¼ points to 49¾, a market source said.

The 6% notes due 2018 were down almost 2 points to 42½ on “very heavy trading,” a trader said, and the 6¼% notes due 2021 were down 2 points to 49.

A trader said the 10% notes due 2022 were up 1 point on “real heavy trading,” finishing at 77½. Another trader said they were as high as 81, and as low as the mid-70s, before finishing “around 78.”

Vladimir Voronkov, Russia’s envoy to OPEC, expressed disapproving remarks on Tuesday and said that the country would not consider cutting supply. Estimates also showed that U.S. crude oil supply appeared to have risen by several million barrels last week ahead of the U.S. Energy Information Administration’s weekly petroleum status report.

Western Texas Intermediate crude was down 66 cents, or 1.31%, to $49.86.

Brent crude was down 79 cents, or 1.54%, to $50.67.

California Resources Corp.’s 8% notes due 2022 were “down a point on a handful of trades” to 73, a trader said.

Linn Energy, LLC’s 7¾% notes due 2021, up 2 points on Monday, were up yet again on Tuesday, posting a ¾ point increase to 31¼.

Joining the majority of energy high yield movement, Denbury Resources’s 6 3/8% notes due 2021 were down ¾ point to 86, per a market source.

The market source went on to say that MEG Energy Corp. 7% notes due 2024 were down 2 points to 87¾, joining Peabody as one of the day’s biggest losers in distressed debt.

Earnings for Freeport

Gold, silver and copper producer Freeport-McMoRan Inc. announced its quarterly results, which were below expectations. Its year-over-year revenue increased to $3.88 billion from $3.38 billion.

The results come a week after the company agreed to sell its California oil and gas properties for $742 million, the proceeds of which will pay down the company’s debt.

A market source listed the company’s 3.55% notes due 2022 up ½ point to 91½.

Its 5.45% notes due 2043 traded up 7/8 point to 82 3/8, a trader said.

Round up

iHeartCommunications Inc.’s 9% notes due 2019 were unchanged at 77½, and its 10 5/8% notes due 2023 were up 5/8 point to 73¾, on what a trader said was the result of some small asset sale news.

Valeant Pharmaceuticals International Inc. had movement in its notes, including the 5 7/8% notes due 2023, which were unchanged at 82¾ but did experience trading throughout the day, one trader said.

The company’s 6 1/8% notes due 2025 were up a ¼ point to 82½, and the 6¾% notes due 2018 were down 1/8 point to 99 5/8.

Satellite communication company Intelsat Corp.’s Jackson-linked 7¼% notes due 2020 were “offered at 76,” a trader said. The 7½% Jackson-linked notes due 2021 were “offered at 75.”

The company’s 7¾% notes due 2021 traded down to 33½, a market source said.

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