Cliffs jumps on possibility of debt take-out; California Resources’ paper retreats with oil

By Stephanie N. Rotondo

Seattle, June 16 – While the distressed debt arena continued to trend lower on Thursday, the day’s most notable name ended with a firm tone.

Traders said Cliffs Natural Resources Inc.’s bonds popped on news the iron ore producer was planning an equity offering to take out the 3.95% notes due 2018. That issue in particular “rallied a pretty good bit,” a trader said.

But away from Cliffs, most price moves were toward the down side.

California Resources Corp., for instance, was “getting hammered,” a trader said, as domestic crude oil prices remained under pressure.

Intelsat SA also continued its descent, falling “a good 2 to 3 points on the day,” according to a trader.

The trader said that most of the declines were centered on the Intelsat Jackson Holdings SA debt. He saw that subsidiary’s 7¼% notes due 2019 fall to 69 from 71 while its 7¼% notes due 2020 drifted down to 65.

“There wasn’t a ton of volume, but it was definitely heavy,” he said.

The unit’s debt has been weakening all week, though there has not been any news to explain the slide.

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