iHeart bonds trade mixed; distressed oil and gas space also mixed; Fannie, Freddie busy, better

By Stephanie N. Rotondo

Seattle, July 24 – A trader said there was “no real activity” in the distressed debt “underworld” on Monday.

Another trader said investors were more focused on high-yield issues that priced last week, such as DAE Funding LLC’s $2.3 billion three-part offering of senior notes.

That deal priced Friday.

As for distressed dealings, “it’s all [iHeartCommunications Inc.],” a trader said.

The paper was mixed on the day as the market waited to see how restructuring negotiations with lenders and bondholders would pan out.

The trader called the 11¼% notes due 2021 off a quarter-point at 75½, while the 14% notes due 2021 slipped a point to 22½.

The trader said the 9% notes due 2019 managed to hold steady at 80¼, while the 7¼% notes due 2027 firmed a point to 40.

The oil and gas sector was also mixed, even as domestic crude oil prices ticked up a touch.

A trader said California Resources Corp.’s 8% notes due 2022 were half a point better at 63½.

However, another market source said the bonds were down nearly 2 points at 63¾.

In MEG Energy Corp., a trader saw the 7% notes due 2024 slightly improving to close at 79½.

A second source called the issue a quarter-point higher at 79¾.

Denbury Resources Inc. and Sanchez Energy Co. paper both wrapped the session with a weaker tone.

A source deemed Denbury’s 6 3/8% notes due 2021 a point lower at 58½, as another trader saw Sanchez’s 6 1/8% notes due 2023 slipping half a point to 84¾.

GSEs gain ground

Fannie Mae and Freddie Mac preferreds were busy and better on Monday.

A source said the activity – and the upward trajectory – was “rather curious.”

He noted that there was a New York Times article over the weekend, which came with the headline “U.S. foresaw better return in seizing Fannie and Freddie profits.”

“You could read anything you want to out of that article,” the source said. The piece, he explained talked about how much money the government spent bailing out the GSEs, versus how much it has gotten back via the so-called “net worth sweep.”

The source added that there was nothing new in the article that hasn’t been said before – thus his confusion as to why the paper was doing so well.

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) rose 59 cents, or 9.42%, to $6.85, with about 1.34 million shares trading. Freddie’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) gained 47 cents, or 7.99%, to close at $6.35.

About 1.87 million of the Freddie preferreds were exchanged.

“It’s bizarre that the market would respond to it [so positively],” the source said of the article. “I think people were responding more to the headline than the substance.”

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.