Energy names rebound despite crude’s modest decline; miners also firm; Toys ‘R’ Us gains post-numbers

By Stephanie N. Rotondo

Seattle, March 10 – A slight decline in crude oil prices did little to sway investors from pushing up distressed energy credits on Thursday.

“Oil is down a little, but all the oils kind of rebounded today,” a trader said.

Whiting Petroleum Corp. continued to be an active name, with its 5¾% notes due 2021 trading up 2½ points to 61½, according to a trader.

Also higher were Chesapeake Energy Corp.’s 8% second-lien notes due 2022, which rose nearly 2 points to 52, the trader said.

In California Resources Corp. paper, the 8% notes due 2022 ticked up 1½ points to 42, while Oasis Petroleum Inc.’s 6 7/8% notes due 2022 added “almost a point,” closing at 70 1/8.

And, EV Energy Partners LP’s 8% senior notes due 2019 put on almost half a point to end at 24½.

Domestic crude, for its part, dipped 27 cents to $38.02 a barrel. The modest decline was attributed in part to a rally in the dollar after the European Central Bank cut interest rates and continued its quantitative easing program.

The euro fell on the news, though it later rebounded – along with oil prices – when the ECB said more rate cuts were unlikely.

Also weighing on the commodity’s pricing was increased concern about whether or not a meeting of oil producers – OPEC and non-OPEC alike – would occur, given that Iran has yet to indicate if it would participate.

Elsewhere in the commodity space, Freeport-McMoRan Inc.’s debt saw “heavy volume” for the day, a trader said.

The trader pegged the 3 7/8% notes due 2023 at 70¼, a gain of over 2 points. The 2 3/8% notes due 2018 meantime inched up over 1½ points to 88.

Teck Resources Ltd.’s 3¾% notes due 2023 were also higher, closing up a quarter-point at 66½.

A trader said there were at least “a dozen trades” in the issue.

Toys posts improved profit

Toys “R” Us Inc.’s 7 3/8% notes due 2018 put on 1½ points in Thursday trading to close at 73 bid, according to a market source.

The gains came as the Wayne, N.J.-based toy retailer reported its fourth-quarter and full-year results late Wednesday.

For the quarter, the company turned a $276 million profit, which compared to a profit of $265 million the year before. For the year, net profit came to $130 million. That compared to a loss of $292 million for the previous fiscal year.

Full-year adjusted EBITDA was $800 million, up from $642 million the year before.

Toys then blamed a decline in the year’s net sales to unfavorable currency exchange rates. Net sales fell to $11.8 billion, a decline of $559 million.

Still, same-store sales improved nearly 1%. Internationally, same-store sales gained 3.2%. Domestically, they were down 0.6%.

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