PG&E mixed as creditors propose bankruptcy exit plan; Endo off on early tender results

By James McCandless

San Antonio, March 28 – The distressed debt market saw more trading in news-driven names in the tail end of the week.

PG&E Corp.’s notes were mixed as its creditors released a $35 billion bankruptcy exit plan on Thursday.

Meanwhile, Endo International plc’s issues moved lower as it announced its early tender results for $1.5 billion of its senior notes.

Sector peer Teva Pharmaceutical Industries Ltd.’s paper was also negative.

Retailer Bed Bath & Beyond, Inc.’s notes were off as activist investors continue to push for the replacement of its chief executive officer and board of directors.

Elsewhere in the space, PetSmart Inc.’s issues ended mixed.

Real estate investment trust CBL & Associates Properties, Inc.’s notes also closed mixed a day after settling a class action lawsuit with its tenants.

Negative returns for oil futures begot similar declines for California Resources Corp.’s and Ensco plc’s notes while EP Energy Corp.’s issues pushed up.

PG&E mixed

PG&E’s notes were mixed in the Thursday session, traders said.

The 4% notes due 2046 fell 2 points to close at 77½ bid. The 4.95% notes due 2047 gained 1¾ points to close at 80¾ bid.

Late Wednesday, a group of creditors for the San Francisco-based bankrupt electric utility proposed a $35 billion bankruptcy exit plan.

A large part of the proposed plan, which runs on a timetable of the rest of the year, would see the creation of a $14 billion cash trust to pay out claims connected to 2017 and 2018 wildfires.

On Tuesday, the company won access to $5.5 billion in debtor-in-possession financing in bankruptcy court after weeks of deliberations.

Endo, Teva lose

Meanwhile, in pharmaceuticals, Endo’s issues ended lower, market sources said.

The 6% notes due 2025 shaved off ¼ point to close at 72½ bid.

Early Thursday, the Dublin-based drug maker announced early tender results for its cash tender offers to purchase notes from four series for up to $1.5 billion, Prospect News reported.

The company received tenders exceeding the tender offer.

The early settlement date is March 29.

Earlier in the week, the company’s structure received a boost after related name Purdue Pharma settled a lawsuit with the state of Oklahoma over its liability in connection to manufacturing drugs connected to the opioid epidemic.

Petach Tivka, Israel-based sector peer Teva’s paper was similarly negative.

The 4.1% bonds due 2046 dropped 1½ points to close at 70 bid.

BB&B declines, PetSmart mixed

In the retail space, Bed Bath & Beyond’s notes trended lower, traders said.

The 5.165% notes due 2044 gave back 2½ points to close at 75¼ bid. The 4.915% notes due 2034 declined by 2 points to close at 78 bid.

The Union, N.J.-based retail chain’s notes snapped a weeklong positive streak spurred by an activist investor push to have the company replace its chief executive officer and entire board of directors.

A group comprising a 5% stake in the name are proposing replacement board members it claims have more retail experience in the hopes of boosting revenues.

“The feeling around retail hasn’t really shifted since the beginning of the year,” a trader said. “In fact, the mood might be slightly worse.”

Phoenix-based pet-supplies retailer PetSmart’s issues were mixed.

The 8 7/8% notes due 2025 added 1¼ points to close at 72½ bid. The 5 7/8% notes due 2025 fell 1 point to close at 83 bid.

CBL mixed

CBL’s paper finished the day similarly mixed, market sources said.

The 5¼% paper due 2023 lost ½ point to close at 76¼ bid. The 4.6% paper due 2024 shot up 3 points to close at 72½ bid.

On Wednesday, the 5¼% paper dropped 4½ points.

The Chattanooga, Tenn.-based retail-focused real estate investment trust announced on Wednesday that it had settled a class action lawsuit brought by tenants for $90 million.

It also announced the suspension of its dividend.

Oil futures negative

Amid lower oil futures, distressed oil tranches trended similarly, traders said.

Los Angeles-based independent oil and gas producer California Resources’ notes fell.

The 8% notes due 2022 shed 4 points to close at 77½ bid.

London-based contract driller Ensco’s issues also saw a slump.

The 7¾% notes due 2026 fell ½ point to close at 84¼ bid. The 7.2% notes due 2027 shed 1¼ points to close at 80¼ bid.

Houston-based producer EP Energy’s paper fared better.

The 8% paper due 2024 rose ¾ point to close at 55½ bid.

At the end of Thursday’s session, West Texas Intermediate crude-oil futures for May delivery were down 11 cents to $59.30 per barrel.

North Sea Brent crude-oil futures for May delivery closed at $67.82 per barrel after a 1 cent loss.

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