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Chesapeake, California Resources weaken; Momentive earnings drag down chemical names
By Stephanie N. Rotondo
Seattle, Nov. 13 – A distressed debt trader said “oil and gas stuff just got hit” Friday as crude oil prices experienced the largest weekly loss in eight months.
West Texas Intermediate crude declined 2.28% to $40.80.
On Thursday, the U.S. Energy Information Administration reported its seventh consecutive week of inventory gains. Come Friday, active U.S. oil rigs increased for the first time in 11 weeks.
In the wake of the crude declines, Chesapeake Energy Corp.’s bonds “got whacked,” a trader said.
The trader saw the 6 5/8% notes due 2020 falling to “58-ish” from 62.
Another trader said there was “lots of volume” in Chesapeake’s debt. He pegged the 6 5/8% notes at 58½, off over 3 points. The 5¾% notes due 2023 declined a deuce to 52¾, he said, as the 3.57% notes due 2019 weakened 1½ points to 56¼.
Meanwhile, there were “tons of trades” in California Resources Corp.’s 6% notes due 2024, according to a trader. He called the issue down 3 points at 62.
Elsewhere in the distressed arena, a trader said there was “weakness in a bunch of chemical names” following Momentive Performance Materials Inc.’s earnings release.
For its part, Momentive’s 3.88% notes due 2021 were deemed down 10 points at 70. The trader also saw Hexion Inc.’s 8 7/8% notes due 2018 losing “4 or so [points]” to end at 72.
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