Halcon Resources lauds debt swap, bonds dive; oil and gas preferreds up on crude gains

By Stephanie N. Rotondo

Phoenix, Aug. 28 – The distressed debt market ended the day with a fairly positive tone, though a trader noted that the “most notable” names of the day were ones that ended decidedly weaker.

Halcon Resources Corp., for instance, saw its debt drop about 10 points across the board after the oil producer announced a private debt exchange.

“They got primed,” a trader said of the leftover bonds’ decline.

Meanwhile, the bonds of J. Crew Group Inc.’s indirect parent company – Chinos Intermediate Holdings A Inc. – “got beat up,” a trader said, following the company’s earnings announcement on Thursday.

Houston-based Halcon Resources said late Thursday that it was exchanging $1.57 billion of notes for $1.02 billion of new 13% third-lien senior secured notes due 2022.

The exchange was privately negotiated and involved $497.2 million of the 9¾% notes due 2020, $774.7 million of the 8 7/8% notes due 2021 and $294.3 million of the 9¼% notes due 2022.

As for the leftover chunks of debt, they took a hefty hit come Friday trading.

A trader said the notes traded down to the mid-30s from the mid-40s, noting that the paper “got primed.”

In the preferred stock space, a trader said that “oil guys are getting a little bounce back” as crude oil prices recovered from the week’s lows.

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