Distressed bonds head into higher territory; energy, coal names follow the trend; iHeart firms

By Stephanie N. Rotondo

Phoenix, Oct. 16 – Distressed debt managed to recover some recent lost ground on Thursday.

“Some things definitely bounced off the lows,” a trader said.

“There were offer-wanteds the whole day long,” another trader said.

The KDP High Yield Index came off of its 52-week low, ending at 71.04, with a 5.91% yield. On Wednesday, the index had hit its low point of 70.93, with a 5.95% yield.

There was a “wild swing” in the energy exploration and production sector, “which had been particularly downtrodden,” according to a trader. Most bonds in that space – as well as in the coal space – were improved on the day.

E&P names improve

“There was a wild swing in the E&P sector,” a trader said.

Quicksilver Resources Inc.’s 7 1/8% notes due 2016 “traded actively,” the trader said. Another trader pegged the issue at 21, unchanged.

The first trader also placed the 9 1/8% notes due 2019 at 52¼, up 6½ points.

However, the 11% notes due 2021 were deemed half a point lower at 54½.

Samson Investments Co.’s 9¾% notes due 2020 were meantime up over 2 points at 78½.

At another desk, SandRidge Energy Inc.’s 7½% notes due 2021 were called 1½ points better at 89 bid, while Linn Energy LLC’s 7¾% notes due 2021 improved almost a point to 96 bid.

Coal sector rallies

The coal space “had a real good rebound to it too,” according to a trader.

He said Walter Energy Inc.’s 8½% notes due 2021 jumped 3 points to 30. In Arch Coal Inc.’s debt, the 7¼% notes due 2021 gained “almost 4 [points],” he said, seeing the issue close at 39½. The 9 7/8% notes due 2019 gained almost 5 points to 45 and the 7¼% notes due 2020 improved 5 points to 47.

The trader also saw Alpha Natural Resources Inc.’s 6¼% notes due 2021 rising 4¾ points to 47.

At another desk, the Alpha Natural paper was deemed up 5½ points to 48 bid.

A third market source said Arch Coal’s 8% notes due 2019 moved up to 69 from a low of 64. The 2021 paper neared 40, up from 34.

iHeart rises

The firmer tone of the market was also helping iHeart Communications Inc.

One trader said the 10% notes due 2018 pushed up 1½ points to 78¾, while the 14% notes due 2021 inched up half a point to 85.

A second trader said the 10% notes traded “as high as 79, up from at least 76.” The 14% notes closed around 85, up from 83, he said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.