Distressed oil bonds gain; Washington Prime, Diamond Sports fall; Hertz notes better

By Cristal Cody

Tupelo, Miss., March 5 – Oil prices soared more than $2 a barrel on Friday on extended production cuts after adding over $3 a barrel in the prior two sessions, sending distressed oil bonds mostly higher on the day.

The Organization of the Petroleum Exporting Countries announced on Thursday that production cuts would be extended for most countries through April.

In the secondary market, Callon Petroleum Co.’s 6 3/8% senior notes due 2026 (Caa2/D) gained another 3¼ points after improving 6 points over the prior two sessions, according to a market source.

The notes were quoted at 85¼ bid after the session ended.

Athabasca Oil Corp.’s 9 7/8% notes due 2022 (/B-/d) also ticked up 4¾ points to 74¼ bid, a source said.

In other distressed trading, Washington Prime Group, LP’s 6.45% notes due 2024 (C/C/C) dropped 9½ points on Friday to head out at 54 bid, sources said.

Hertz Corp.’s bonds climbed as the company prepares to exit bankruptcy, a source said.

The car rental operator’s 5½% notes due 2024 improved to 80 bid by late in the day after declining 2½ points to 78¾ bid in the previous session.

Elsewhere, Diamond Sports Group LLC’s 5 3/8% senior secured notes due 2026 (Ba3/CCC+) softened 1 point on Friday to 68 bid, a market source said.

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