Commodity and energy names rallied as much as 10 points this week as oil climbing to the highest level since June, and thermal coal prices hitting its highest level since the start of 2014, snapped yields tighter across the sector.
Coal mining concern Murray Energy 11.25% notes due 2021 have gained 10 points on the week after climbing another two points today, to 64.5.
Topping the actively traded list, now bankrupt Peabody Energy 6.25% notes due 2021, and 6% notes due 2018, are up seven and 10 points, respectively, on the week, at around 34.5.
Coal prices hit a 30-month high on Tuesday after surging more than 50% during the month of September following a series of rules and regulations in China that are expected to impact freight costs and production output.
In names tied to the oil-and- gas sector, Chesapeake 5.75% notes due 2023 are up more than seven points on the week after gaining more than 1.25 points today, to 86.5.
California Resources 6% notes due 2024 were up as much as six points in odd-lot clips. The new 8% second-lien exchange notes due 2022 gained one point, to 69.25.
Independent oil-and-gas company Denbury Resources 5.5% subordinated notes due 2022 meanwhile traded in a round lot at 77.75, up 2.75 points on the day and nearly eight points on the week.
Caa2/CCC+ EP Energy 6.375% notes due 2023 gained 2.75 points, to 63.75.
The recently issued Sabine Pass Liquefaction $1.5 billion of 5% secured notes due 2027 were up three-eighths of a point, at 103.375.
Bucking the trend, Dynegy 7.625% notes due 2024 are down half a point, at 98.5. The company is currently marketing a new $500 million offering of eight year senior notes, expected to price today around talk of 8.125% area to fund a buyout.
U.S. government data unexpectedly showing a large draw for a fifth straight week sent the underlying WTI gaining more than 2% and closing in on a key $50 barrier. Oil has jumped 13 percent over the past six sessions after the Organization of the Petroleum Exporting Countries announced plans to limit output.
Global mining giant Freeport-McMoRan notes remained steady after gold hit its lowest level since June on Tuesday. Freeport 4.55% notes due 2024 were up nearly a point on the day, at 91.125, after closing half a point lower on Tuesday.
Alcoa’s recent $500 million offering of 7% notes due 2026 were near unchanged, at 104.375, from par issuance late September.
Also helping to bolster performance is the relatively thin supply out of the primary market, with deal announcements on pause through the earlier part of the week until Dynegy launched a drive-by offering Wednesday morning.
Issuance for the week, and essentially the start of the fourth quarter, has been predominately muted. With the exclusion of the expected Dynegy paper, year-to-date volume totals $181.61 billion, a 20% decline from this same time last year. — Rachelle Kakouris/Jakema Lewis
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