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Published on 9/9/2015 in the Prospect News High Yield Daily.

Distressed bonds continue to move up; Chesapeake racks up gains; oil and gas space firms

By Stephanie N. Rotondo

Phoenix, Sept. 9 – The distressed debt market remained firm on Wednesday, despite weakness in the equity markets.

Equities dropped by more than 1% during the session, erasing earlier gains that came on the back of positive employment data.

And while the distressed space was higher, overall liquidity was not stellar as investors instead focused on high-yielder Frontier Communications Corp. The company launched a roadshow on Wednesday for a $6.6 billion three-part offering of senior notes, the proceeds of which will be used to buy wireline assets from Verizon.

A trader noted that among the day’s most actively traded issues, three of them were Frontier bonds.

As for more distressed names, Chesapeake Energy Corp. continued to be active. The bonds began to improve on Tuesday as the company announced a new gas gathering agreement with the Williams Cos. and some of its subsidiaries.

The debt remained on an upward track during the midweek session, according to market sources.

Elsewhere in the oil and gas space, bonds were mostly up despite a 3.61% decline in U.S. domestic crude oil prices.

A trader saw Consol Energy Inc.’s 5 7/8% notes due 2022 driving up a deuce to 75 3/8. The trader also pegged Halcon Resources Corp.’s 8 7/8% notes due 2021 at 35½, up a point.

Linn Energy LLC’s 6¼% notes due 2019 meantime edged up a quarter-point to 36¼.


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