Shelf Drilling notes dip; Rio Energy gains; Hertz, Mallinckrodt, Diamond Sports improve

By Cristal Cody

Tupelo, Miss., March 16 – Distressed energy bonds saw mixed trading on Tuesday as oil prices softened a third day.

Shelf Drilling Holdings Ltd.’s 8¼% senior notes due 2025 (Caa3/CCC+) slipped 1½ points during the session to 75½ bid after declining ¾ point in the prior day, a market source said.

The company priced $310 million of new 8 7/8% senior secured notes due 2024 on Friday.

Meanwhile, Rio Energy International, Inc.’s 6 7/8% notes due 2025 (Ca) traded more than 1¼ points higher at 66¼ bid by late afternoon, a source said.

Bankrupt car rental company Hertz Corp.’s 5½% notes due 2024 climbed 1½ points on Tuesday to 88¼ bid on strong volume, a market source said.

The notes are trading more than 10 points higher since the end of February.

Bankrupt pharmaceuticals maker Mallinckrodt plc’s bonds remained mostly stronger in the distressed space on Tuesday, a source said.

Mallinckrodt’s 4¾% senior notes due 2023 rose more than 2 points to 16¼ bid.

In other distressed secondary trading, Diamond Sports Group LLC’s 6 5/8% senior notes due 2027 (B3/CCC-) were quoted up 2 points at 58 bid on strong volume on Tuesday, a market source said.

The notes had declined ½ point on Monday.

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