NEW YORK, Jan 29 (IFR) - Yield spreads on bonds issued by
oil and gas company Hess widened 25 basis points on Tuesday to
become the latest victim of a rise in investor activism.
The move came amid expectations that hedge fund Elliot
Management would be successful in implementing drastic steps to
enhance returns to the company's shareholders at the expense of
As of 3pm, Hess's 5.6% 2041 bonds were the most
actively traded bonds of the session, according to Tradeweb,
widening 25bp to Treasuries plus 194bp.
The company's 6.0% 2040s were trading 45bp wider at 217bp
over Treasuries. Five-year credit default swaps were 22bp, or
14.5%, wider at plus 267.5bp-182.5bp.
Elliott Management, which owns a 4% stake in Hess, will push
to nominate five executives to the board in a bid to break up
the company, according to a letter published by Elliott. The
fund will also push for a master limited partnership structure
to maximize shareholder value.
The letter comes a day after Hess announced that it would
sell its network of oil-storage terminals and its refinery
business and become predominantly an exploration- and
ConocoPhillips, Marathon Oil and Murphy Oil have all
recently split off their refining operations to create
On Monday, Transocean bond spreads came under pressure after
activist investor Carl Icahn said the company should return
value to its shareholders by paying a dividend of at least US$4