California Resources sees ‘tons of trades,’ but unmoved as oil gains slightly; Jones Energy down after asset sale

By Colin Hanner

Chicago, June 23 – Trading was lackluster in the distressed debt market on Friday, market sources said, a day that capped several sessions of frenzied trading in the exploration and production space following the dive of oil and the surge of pharmaceutical and hospital companies following the Senate’s rebranding of the health care bill.

California Resources Corp. continued to be one of most heavily-traded names, though was sideways on the session, a market source said.

“There wasn’t really anything that was a mover,” a market source said. “I think people were tired at the end of the week.”

“No one is taking big bets heading into the weekend,” the source continued, adding that the next two weeks will see people taking time off for the upcoming July 4 holiday.

Breaking from the mostly across-the-board sideways action, Austin-based oil and natural gas company, Jones Energy Holdings, LLC, saw a double-digit loss in what appeared to be a response to the company’s sale of non-core assets in the Arkoma Basin.

Valeant Pharmaceuticals International Inc., the center of attention on Thursday’s secondary trading following the Senate rollout of the Republican-backed health care legislation, took a backseat to any kind of movement on Friday, trending in both directions fractionally.

Pet retailer PetSmart Inc., on the whole down on the week, was unchanged in one of its issues, a market source said.

E&P sideways after small market gain

Following a slight gain in the commodity market on Thursday, West Texas Intermediate crude oil settled up nearly 30 cents higher to $43 a barrel after spending the previous sessions below the level.

Distressed oil and natural gas companies were not as quick to jump on another slight reprieve, with California Resources’ 8% notes due 2022 leading the sector with “a ton of trades,” a market source said.

Yet, those notes were unchanged at 59½.

“They were active, but had no bounce,” a market source said.

EP Energy Corp.’s 8% notes due 2025 were up ¼ point to 74¼.

Houston-based Sanchez Energy Corp.’s 6 1/8% notes due 2023 were unchanged at 76 5/8.

Contract driller Noble Holding International Ltd.’s 7.70% notes due 2025 were down 1½ point to 73, and the 7¾% notes due 2024 were down ¼ point to 75¾.

Chesapeake Energy Corp., whose bonds plunged in tandem with its stock on Wednesday and Thursday, saw another decline in its 5¾% notes due 2023, which were down 1½ points to 87½.

Jones trades down after sale

Jones Energy’s 6¾% notes due 2022 saw a large volume-driven dip after the company announced the $70 million sale of non-core assets in the Arkoma Basin, a market source said.

Those notes, which hadn’t traded with any notable volume since June 14, were down 13 points to 66½, the market source said. The issue saw more than $3 million exchange hands on the day.

Proceeds of the sale will go toward paying outstanding borrowings under its revolving credit facility, the company said in a news release.

Valeant quiet following health care momentum

In the health care bill released on Thursday, lower drug prices, a frequently lauded tenet of President Trump’s campaign and time in office, were largely left out of the bill, causing pharmaceutical bonds to gain, though that trend did not carry over into Friday.

The most-traded issue of Junkbondland a day prior, Valeant’s 6 1/8% notes due 2025 were up 1/8 point to 84 1/8, a market source said.

Moving in the other direction, its 5 3/8% notes due 2020 were down 1/8 point to 96¼.

Endo International plc’s 6% notes due 2025 were up ¼ point to 83¼.

PetSmart stops the leak

PetSmart’s recent selloff calmed on Friday, with the 7 1/8% notes due 2023 unchanged at 87 7/8, market sources said.

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