Energy names solidly higher on oil price gains; Altice improves but wireline names lower

By Paul Deckelman

New York, Dec. 1 – Traders in distressed debt and bonds of otherwise underperforming companies and sectors said that oil and natural gas exploration and production company bonds were up solidly on Friday, pushed higher by a second straight session of rising oil prices.

They saw gains in such names as California Resources Corp., Denbury Resources, Inc., Sanchez Energy Corp. and Jones Energy Corp.

Away from the oil patch, the battered bonds of European cable and broadband service provider Altice were seen rebounding on Friday.

But domestic wireline names like Frontier Communications Corp. and CenturyLink, Inc. were on the downside.

In the convertibles space Lam Research Corp.’s paper was being hammered down for a third consecutive session.

Energy names get a boost

In the energy sphere, oil and gas names were riding a wave of upside momentum, helped by a second straight session of higher world crude oil prices.

California Resources’ 8% notes due 2022 shot up by 1 7/8 points to 76¼ bid, with over $33 million traded.

Elsewhere in that sector, Denbury Resources’ 5½% notes due 2022 gained nearly 4 points on the day to finish at 71¼ bid, with over $11 million having traded, while Sanchez Energy’s 6 1/8% notes due 2023 were nearly 2 point gainers, closing at 86 5/8 bid, also with over $11 million traded.

The sector got a boost from higher crude prices, with January-delivery West Texas Intermediate better by 96 cents a barrel in New York Mercantile Exchange trading, ending at $58.36, while the February North Sea Brent crude contract, the new front month, rose to $63.73 per barrel in London futures trading, up $1.10 on the day.

Altice shows improvement

In the communications space Netherland-based cable and broadband operator Altice’s recently beleaguered paper got a break on Friday, rebounding solidly.

A trader saw its 7¾% financing company notes due 2022 up 1 point on the session to 96¼ bid, on volume of more than $17 million.

Altice’s SFR Group’s 7 3/8% notes due 2026 improved by ¾ point, closing at 100½ bid, also on volume of around $17 million.

But domestic wireline credits remained under pressure on Friday.

Stamford, Conn.-based Frontier Communications’ 8½% notes due 202 ended the day down 1 point at 91¾ bid,

Monroe, La.-based sector peer CenturyLink’s 7.65% bonds due 2042 dropped by 1 7/8 points, closing at 84 bid.

Semiconductor suffering continues

In the convertibles market, Lam Research’s paper continued to be hammered for a third consecutive session in the wake of a Morgan Stanley warning that the sector could see a sharp pullback in demand ahead.

Its 2.65% convertible notes due 2041 tumbled another 24 points on Friday after losing 52 points the day before.

Those notes had also gotten beat up in intraday trading on Wednesday, before managing to rebound a little and eke out a small gain, but were unable to hold back the negative tide on Thursday and again on Friday.

-Abigail W. Adams contributed to this review

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