Halcon Resources’ debt gains on prepackaged news; Valeant bonds drift lower; Caesars also weakens

By Stephanie N. Rotondo

Seattle, May 19 – The distressed debt market was trading off Thursday, in line with the broader markets.

“ETFs were throwing out everything but the kitchen sink today,” a trader said. He opined that the reason was because the funds “loaded up on bonds and couldn’t offset that with the index.”

Halcon Resources Corp., however, bucked the overall trend. The company’s debt popped after a prepackaged bankruptcy plan was announced.

“Halcon was up a bunch,” a trader said. He saw the 8 5/8% notes due 2020 traded up to a 93 to 94 context, which was “up 10 points.”

He also saw the 13% notes due 2022 moving up to the mid-50s.

Another trader said the 13% notes closed at 54. He noted that the paper doesn’t trade often and that the bonds were around 30 at the end of March.

The looming filing brings the list of oil and gas companies currently under bankruptcy protections to over 60.

Away from Halcon, it was just a downhill slide, with or without news.

Valeant Pharmaceuticals International Inc., for instance, weakened after pushing up on Wednesday on news the struggling drug company was considering asset sales to cut its debt load.

Caesars Entertainment Corp. was another name that was coming in, though it was trending higher during the midweek session. The debt had improved after the parent company said it would contribute about $4 billion to its operating company’s restructuring.

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