Chesapeake Energy, California Resources miss; Intelsat stays strong; Cobalt spreads widen

By Stephanie N. Rotondo

Seattle, Aug. 4 – Fresh earnings out of the struggling oil and gas sector was prompting moves in the distressed debt market on Thursday.

Chesapeake Energy Corp. reported its second-quarter results, missing analysts’ estimates. But while the numbers missed, the company focused on its debt reduction efforts and noted that it was increasing production for the current year. In doing so, it helped its bonds move higher on the day.

California Resources Corp. also came out with earnings. Like Chesapeake, the figures missed estimates, but touted its debt-cutting.

Bonds were little changed in the wake of the announcement.

Away from oil and gas, Intelsat SA bonds continued to inch higher, a trader said.

The trader called the name “up another point in general,” seeing the 7¾% notes due 2021 ending around 27.

Another market source pegged the 6 5/8% notes due 2022 at 71 bid, up half a point.

Cobalt International Energy Inc.’s convertible bonds continued to be on the active side in Thursday trading.

However, a trader noted that the 2.625% convertible notes due 2019 were holding at levels seen on Wednesday, placing the issue at 38.5.

“That’s exactly where they were yesterday,” the trader said at mid-morning. “They are trading up a storm at that same price today.”

He did note that the 3.125% convertible notes due 2024 “might have come in a little bit,” trading in a range of 32.125 to 32.5.

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