Peabody treks down with lingering decisions; rate hike causes oil drop; iHeart upbeat post-downturn

By Colin Hanner

Chicago, Dec. 14 – Distressed markets were mixed on Wednesday, taking blows from the Federal Reserve’s decision to raise interest rates by a quarter of a point, as well as company-specific news.

Peabody Energy Corp. was at the crux of decliners on the session, spurred by the company’s up-in-the-air restructuring agreement.

The Fed’s decision also caused a downturn in equity markets and oil prices, bringing high-yield exploration and production bonds down in tandem.

Weatherford International Ltd. was down several points amid the price of oil, as was California Resources Corp. and Transocean Inc.

After announcing on Tuesday that it would not repay $57.1 million of its senior notes held by Clear Channel Holdings, iHeartMedia, Inc. continued to climb after a short period of losses in early-morning trading a day prior.

Peabody down, again

Similar to Tuesday’s sentiment, traders had a difficult time pinning what was the cause of the downturn in St. Louis-based coal company Peabody’s distressed notes, but they pointed again to the looming restructuring.

Its 6½% notes due 2020 were down 2½ points to 72½, a market source said.

And though the 10% notes due 2022 saw smaller volume, they were down 2 points to 92½.

Late Wednesday, Peabody had approved a debtor-in-possession loan repayment and exclusivity extension in an 8-K filing with the U.S. Securities and Exchange Commission.

According to the filing, the company is required to file with the bankruptcy court a plan of reorganization and disclosure statement by Dec. 21.

Oil down on rate rise

Oil prices dropped on Wednesday after the Fed’s afternoon decision as the dollar swelled, prompting several energy names to fall.

West Texas Intermediate crude was down $1.94, or 3.7%, to $51.04 at close, while Brent crude was down $1.82, or 3.3%, to $53.90.

Weatherford International Ltd.’s 6½% notes due 2036 were down 3 points on a few trades, a market source said, and settled with an 80 handle.

Offshore driller Transocean Inc.’s 8 1/8% notes due 2021 were down 1¾ points to 102¾.

A market source said SESI LLC’s 7 1/8% notes due 2021 were down ½ point to 102¼.

California Resources Corp.’s 8% notes due 2022 were down 1 point to 90½, a market source said.

iHeart beats again

Intraday swings on Tuesday initially saw iHeartMedia’s notes on the downswing, but they shot up as the afternoon continued.

The increases continued Wednesday, especially in the company’s 14% notes due 2021, which traded up 2 points to 41½, a market source said.

Also seeing a 2-point uptick were its 10% notes due 2018, which settled with a 70 handle.

Market round up

Luxembourg-based Intelsat SA’s Jackson-linked 7¼% notes due 2019 were up 1 point to 85, a market source said.

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