California Resources bonds slide on debt swap; Chesapeake, other energy names off as crude drops

By Paul Deckelman

New York, Nov. 12 – California Resources Corp.’s bonds fell in active trading on Thursday after the oil and natural gas exploration and production company announced plans for a discount debt exchange.

Even without the exchange offer, those California Resources bonds would have likely finished lower on Thursday in line with falling crude oil prices, which declined to their lowest levels since late August after a considerably larger than expected rise in U.S. oil stockpiles last week.

The unexpectedly big gain – more than four times what analysts were expecting – dragged such California Resources sector peers as Chesapeake Energy Corp. lower in active dealings.

In the convertibles market, solar energy technology provider SunEdison, Inc.’s recently beleaguered paper remained under pressure on Thursday, in line with a fall in the company’s shares.

Away from the energy arena, regional supermarket operator Roundy’s Inc.’s formerly distressed bonds – they had been in the mid-50s as recently as the end of October – traded actively and at considerably higher levels than previously on Wednesday’s announcement that grocery industry giant Kroger Co. will acquire Roundy’s for $178 million in cash, plus assumption of $646 million of debt.

Another type of retailer – high-end department store operator Neiman Marcus Group LLC – saw its term loan trade off amid generalized investor angst about the retailing sector, especially after competitor Macy’s released downwardly-revised full-year guidance.

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