Distressed energy bonds climb; Transocean, PBF improve; Nine Energy rallies; Endo up

By Cristal Cody

Tupelo, Miss., March 8 – Distressed energy paper ended higher as oil prices continued to climb on Tuesday following U.S. president Joe Biden’s announcement of a ban on imports of Russian oil, natural gas and coal.

The sanctions and economic fallout against Russia for its invasion of Ukraine continued over the day with McDonald Corp.’s announcement that it will temporarily close restaurants in 850 communities in Russia.

Biden noted on Tuesday that major companies, including Visa Inc., Mastercard Inc. and American Express Co., have suspended services in Russia “without even being asked” to by the White House.

London-based Shell plc also announced on Tuesday that it will stop all spot purchases of Russian crude oil and close its service stations, aviation fuels and lubricants operations in Russia.

West Texas Intermediate crude oil benchmark futures for April deliveries settled $4.30 higher at $123.70 a barrel.

Brent crude oil prices for May deliveries rose $4.77 to settle the day at $127.98 a barrel.

PBF Energy Inc.’s notes traded about 2 points to 3 points better on Tuesday.

Transocean Inc.’s bonds were about 1 point to 2 points higher after gaining about 1¼ points to 3 points on Monday.

Nine Energy Service, Inc.’s 8¾% notes due 2023 (Caa3/D) surged 11 1/8 points on Tuesday on the heels of the release of the company’s fourth-quarter earnings results on Monday.

Meanwhile, Endo International plc’s 6% senior notes due 2028 (Caa3/CCC-) were about 1/8 point higher in heavy trading during the session following regulatory reports of shares sold by company insiders.

PBF Energy gains

PBF Energy’s 6% senior notes due 2028 (Caa1/B/B-) were quoted nearly 3 points higher on Tuesday at 80½ bid on more than $11.89 million of paper traded, a source reported.

The issue picked up 1 point on Monday.

The Parsippany, N.J.-based petroleum refiner’s 7¼% senior notes due 2025 (Caa1/B/B-) also traded 2 points better at 90 bid on over $10 million of secondary volume on Tuesday.

Transocean bonds up

Transocean’s 7¼% senior notes due 2025 (Ca/CCC) moved over 2 points higher to 84½ bid by the day’s end on $8.5 million of secondary action, a source said.

The Vernier, Switzerland-based offshore driller’s 6.8% senior notes due 2038 (C/CCC) traded nearly 1½ points better on Tuesday at the 64 bid area.

The issue saw over $4 million of secondary volume.

Nine Energy rallies

Nine Energy's 8¾% notes due 2023 (Caa3/D) shot up 11 1/8 points to 61¼ bid on over $8.7 million of supply following the company’s earnings conference call on Tuesday, a source said.

The notes were up 2¼ points in Monday’s session.

Nine Energy reported its fourth quarter and 2021 earnings results on Monday and held the investor call at the market open on Tuesday.

The company reported higher revenue and a lower net loss for the fourth quarter.

The Houston-based oilfield services company said in its 10-K filing released Tuesday that it is “currently out of compliance with the New York Stock Exchange’s minimum market capitalization requirement” and is “at risk of the NYSE delisting our common stock.”

Nine Energy reported that it has submitted a plan to the NYSE’s listings committee to regain compliance after first receiving a non-compliance notice in January.

Nine Energy’s shares soared 57.66% to $5.66 on Tuesday.

Endo notes active

Endo Finance LLC’s 6% senior notes due 2028 (Caa3/CCC-) were quoted about 1/8 point higher at better than 62¾ bid on secondary action totaling $15.55 million on Tuesday, a source said.

Endo International last week reported a fourth-quarter loss but improved revenue.

Company insiders that included president and chief executive officer Blaise Coleman filed notices on Tuesday with the Securities and Exchange Commission of Endo shares that were disposed of after vesting.

The Dublin-based pharmaceuticals maker announced in February that it expected a Tennessee state court to issue a default judgment against its subsidiaries regarding opioid-related claims in 13 counties.

Endo has settled opioid-related lawsuits in other states, including a $65 million opioid-related settlement with Florida reported in January.

Global defaults flat

In other market activity on Tuesday, S&P Global Ratings said the 2022 global corporate default tally remains at 10, unchanged from its last report on Feb. 24 and down from the 18 defaults reported in the same period in 2021.

Emerging markets is the only region where the four defaults so far this year are higher at double the number seen in the year-ago period, S&P said.

The 12-month-trailing speculative-grade default rate increased in emerging markets in January to 1.9% from 1.8% in December.

Distressed returns soft

The S&P U.S. High Yield Corporate Distressed Bond index one-day total return remained soft on Monday at minus 0.2%, compared to 0.07% in the same session a week ago.

Month-to-date total returns improved to minus 1.23% at the week’s start versus minus 1.85% in the week ago session.

Year-to-date index returns were softer on Monday at minus 4.54%, compared to minus 3.35% the same day last week.

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