Energy takes a back seat in distressed world as 21st Century, Abengoa, Hertz bonds fall on news

By Paul Deckelman

New York, Nov. 14 – The distressed-debt market ended the week on Friday with the heretofore hard-hit energy sector – recently reeling from falling oil prices – seeming to stabilize a little as crude prices steadied. Credits which had been getting clobbered earlier in the week, including California Resources Corp. and Samson Investment Co. were seen actually doing better on the day.

The focus instead turned to non-energy credits that came under scrutiny for a variety of reasons.

Spanish engineering and construction company Abengoa SA’s bonds slid on investor confusion over whether or not some of the company’s debt was considered to be recourse debt – meaning the parent company is liable for it – or non-recourse.

Cancer-care company 21st Century Oncology Holdings Inc.’s paper was off as federal regulators questioned whether the company improperly billed Medicare for procedures that its patients underwent.

Hertz Corp.’s several issues of bonds were seen skidding lower, and on considerable volume, after the vehicle-rental giant confirmed investor worries that its accounting issues ran even deeper than previously thought, saying it would restate its results for 2012 and 2013, on top of the earlier restatement of its 2011 numbers.

Another company whose bonds got pounded was automotive components manufacturer Chassix, Inc. – although unlike Abengoa, 21st Century Oncology and Hertz, there was no immediate information available as to the likely catalyst for that downside move.

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