Energy names dominate distressed; First Energy adds to gains; Frontier, Intelsat stay busy

By James McCandless and Paul Deckelman

San Antonio, Texas, Jan. 24 – Oil, natural gas and other energy-related companies drove the market for distressed debt and underperforming issues on Wednesday, with positive commodity prices and Saudi comments on oil at the World Economic Forum in Davos accounting for much of the volume, traders said.

The most active name in the energy sector was EP Energy Corp. Another highly traded name was coal producer Armstrong Energy, Inc., which announced that Murray Energy Corp. would take ownership of a majority of the bankrupt company’s assets, according to a market source.

Other energy notes that were actively traded included Denbury Resources Inc. and California Resources Corp.

In the utility area, FirstEnergy Corp. notes extended gains that were spurred by the news earlier this week that several investors had put up $2.5 billion for the company. The notes rose further after Moody’s Investors Service confirmed its stable outlook for the company, a trader said.

In the telecom space, Frontier Communications Corp.’s paper and Intelsat SA’s notes continued their high volume of activity, though with mixed results.

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