Forest Oil paper nosedives as merger changes kill change-of-control put; iHeart gains

By Paul Deckelman and Paul A. Harris

New York, Dec. 16 – Cascading oil prices continued to take their toll on high-yield oil and gas sector names as Chesapeake Energy Corp., Sand Ridge Energy, Inc. and Samson Investment Co. in Tuesday’s trading.

But the day’s biggest loser in the energy group – Forest Oil Corp. – plunged for reasons not directly related to the oil price slide; rather, the exploration and production company, which was bought by sector peer Sabine Oil & Gas LLC in a transaction that closed on Tuesday, announced revised merger terms that will not trigger the change-of-control put provision in its bonds indentures.

Sabine’s bonds meantime gyrated around at better levels.

Also on the upside, iHeart Media Inc.’s bonds were higher in active dealings.

The high yield primary sphere stayed quiet on Tuesday.

Market sources meantime saw continued daily outflows of cash from high yield mutual and exchange-traded funds.

Statistical indicators of junk market performance were off across the board for a fifth consecutive session on Tuesday and were down all around for the seventh session in the last eight, a bearish pattern only interrupted by a mixed session exactly a week ago.

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