Billionaire hedge-fund manager Paul Singer's demand that Hess Corp. find ways to bolster shareholder returns is turning into a windfall for bondholders.

While Hess's $5 billion of notes suffered the industry's biggest losses a year ago, when Singer's Elliott Management Corp. said on Jan. 29 that a "substantial divestment program" could help maximize value for equity holders, the bonds have since returned 3.9 percent. The $480 billion of debt issued by energy companies and tracked by Bloomberg has declined 0.77 percent in the same span.

Criticized by Elliott that it was doing "the least possible to maintain the status quo" as its stock languished, Hess has since moved to divest its refining and retail business and allocated $2.4 billion from asset sales to reduce debt. The oil producer, which had the highest leverage of the four largest U.S. integrated oil companies at the end of September, said last week it will spin off its 1,258 gasoline stations.