A recovery in Norway's junk bond market trading is opening the door again for companies hammered by plunging oil prices.

Investors have returned and are driving yields lower, said Roar Tveit, who manages a 4.6 billion-krone ($570 million) bond portfolio at Holberg Fondsforvaltning AS in Bergen, Norway.

"There are a lot more buyers in the market and prices in the secondary market have started to rise," Tveit said.

"If the current market sentiment continues a couple more weeks the primary market will probably pick up again."

Norwegian junk debt issuance stalled last year as oil prices slumped 50 percent, causing bond investors in western Europe's largest crude producer to abandon the market amid concerns over defaults.

The price of benchmark Brent Crude has since stabilized and is even up 1.7 percent this year.

The DNB High-Yield Norway Total Return Index has rallied 5 percent from a low in February.

Bond issuance dropped 68 percent to 12.1 billion krone in the first quarter from a year earlier. The share of junk-rated issuance fell to 34 percent, compared with 62 percent for all of 2014, according to Nordea Bank AB.

Paying up

The market started to thaw in March. Stolt-Nielsen Ltd, the world's largest chemical tanker company, issued a 1.1 billion-krone five-year bond in March at 4.1 percentage points over the three-month Norway interbank offered rate, or Nibor. It had to pay up, in a bond sale in March last year it achieved a spread of 3.35 percentage points over Nibor.

"Based on substantial initial interest we decided to test with a deal of 800 million kroner," Chief Executive Officer Niels G. Stolt-Nielsen said in an e-mailed response to questions. "We ended up with the issue well oversubscribed."

Other junk-rated issuers tapping Norwegian demand this year include GlobalConnect A/S and Genel Energy Plc.

"The primary market has been down since the summer of 2014; now it has begun to start up again," Tveit said.

"We bought Stolt-Nielsen before Easter. It was the first public deal in the market."

While the market is starting to gather pace, investors have become more discerning and the difficulties are evident.

Stockholm-based oil explorer PA Resources AB, which has issued a 900 million Norwegian krone bond, is in talks with bondholders to defer payments amid calls for bankruptcy. Det Norske Oljeselskap ASA, a Norwegian oil producer, this month agreed with investors to change the covenants on a security in exchange for higher interest rates.