Halcon Resources bonds remain firm despite S&P downgrade; Alliance One debt ends unchanged

By Stephanie N. Rotondo

Phoenix, April 10 – Distressed bonds were generally steady on Friday, though liquidity lightened up going into the weekend.

In the oil and gas space, Halcon Resources Corp. shrugged off a downgrade from Standard & Poor’s. The rating change came one day after the company announced a private debt-for-equity exchange.

Instead of weakening on the news, the debt remained on an upward tick, following Thursday’s gains from the exchange news.

The 9¾% notes due 2020 closed around 78, up from a 76½ to 77 context previously, according to a market source. The 8 7/8% notes due 2021 were seen climbing to nearly 77, up from previous trades with a 75 handle.

The Houston-based oil and gas company said it had entered into an exchange agreement with two funds managed by Franklin Resources Inc. of said notes, in which the company will exchange $116.5 million of the bonds for 65.5 million shares of stock.

Among other companies that have recently seen ratings changes, Alliance One International Inc.’s 9 7/8% notes due 2021 were holding steady following a downgrade on Thursday.

The notes were pegged at 88½ bid, 88¾ offered.

On Wednesday, S&P dropped the Morrisville, N.C.-based tobacco distributor to CCC+ from B-.

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