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Distressed energy debt rises as crude oil prices near $50; Intelsat, iHeart bonds end higher
By Stephanie N. Rotondo
Seattle, May 25 – Rising oil prices were once again boosting distressed oil and gas bonds on Wednesday.
“Energy in general felt a touch better with oil prices moving higher,” a trader said.
For its part, domestic crude improved over 2% in midweek trading, edging ever closer to the $50 mark. The gains were due to a higher-than-expected drawdown of U.S. stockpiles.
In response, California Resources Corp.’s 8% second-lien notes due 2022 surged “a couple points” to 71½, according to one trader.
At another desk, a source pegged Chesapeake Energy Corp.’s 6 5/8% notes due 2020 at 64¾ bid, up almost 3 points for the day. Denbury Resources Inc.’s 6 3/8% notes due 2021 were seen rising almost 2 points to 68½ bid.
As for bankrupt Linn Energy LLC, its 7¾% notes due 2021 ticked up half a point to 15 bid.
Given that the company is in bankruptcy, that issue trades flat, or without accrued interest.
Aside from oil names, a trader said that Intelsat SA bonds “kept creeping up a touch.”
He saw the 7¾% notes due 2021 trading as high as 30½.
Elsewhere in the media and telecommunications space, a trader said iHeartMedia Inc.’s 10% notes due 2018 were “moving up as well,” trading “up a couple more points” to 55.
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