Distressed energy paper boosted as crude prices pop; reform push helps Fannie, Freddie

By Stephanie N. Rotondo

Seattle, June 6 – The distressed debt market was on the rise Monday, led by a booming energy space.

Oil and gas names were meantime being led higher by a sizeable gain in domestic crude oil prices. Crude improved by 2.22% on the day, trading up to $49.70 a barrel.

The commodity’s rise was due to concerns about supply, especially as Nigerian production has fallen by almost 200,000 bpd in the wake of attacks against oil infrastructure.

A trader said there were “a bunch of trades” in Chesapeake Energy Corp.’s 8% second-lien notes due 2022. He deemed the issue up over a point to 83¼.

Another trader said the debt was 3 points better at 83.

Yet another market source pegged the 6 5/8% notes due 2020 at 71½ bid, a gain of over 3 points on the day.

In California Resources Corp. paper, a trader said the 8% second-lien notes due 2022 were up by “1 and change” points at 73½. The 5½% notes due 2021 ticked up a point to 54½, he said.

A second trader saw the 8% notes adding “about a point,” closing around 73.

WPX Energy Inc. was also firming during the session, after the Tulsa-based company upwardly revised its annual production guidance.

Fannie Mae and Freddie Mac preferreds remained on an upward trajectory on Monday as recent developments in GSE-linked lawsuits have spurred both sides of the Congressional aisle to renew calls for GSE reform.

© 2015 Prospect News.
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