PG&E mixed after new CEO, directors appointed; PetSmart gains after amendment approval

By James McCandless

San Antonio, April 4 – Towards the end of the week, the distressed market saw familiar names trading that have permeated recent activity.

PG&E Corp.’s notes were mixed after the company appointed a new chief executive officer and a slate of new board members.

Meanwhile, in retail, PetSmart Inc.’s issues gained a day after the company gained a majority of lender’s approval for a loan amendment.

Sector peer Rite Aid Corp.’s paper declined under continuing pressure.

Elsewhere, oil and gas name Weatherford International plc’s notes dropped.

A mixed ending for oil futures saw California Resources Corp.’s issues lose while Ensco plc’s paper finished mixed and Halcon Resources Corp.’s notes rose.

Chemicals name Hexion Inc.’s issues were mixed.

In telecom, Intelsat SA’s paper continued a positive streak.

PG&E mixed

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

The 3¾% notes due 2042 rose 1¼ points to close at 78¾ bid. The 4% notes due 2046 shaved off ¼ point to close at 80 bid.

Late Wednesday, the San Francisco-based bankrupt electric utility announced the appointment of William Johnson as chief executive officer and president and appointed 10 new directors to its board of directors, Prospect News reported.

The new board members will be confirmed at an imminent board meeting.

Johnson previously served as the CEO for the Tennessee Valley Authority for six years.

After the announcement, California officials expressed concern that the new slate of executives did not possess enough utilities experience.

“Right now the focus should be on steering through bankruptcy,” a trader said.

The company filed for Chapter 11 bankruptcy earlier this year after recent California wildfires exposed it to billions in liabilities charges.

PetSmart up, Rite Aid off

Meanwhile, in the retail space, PetSmart’s issues gained, market sources said.

The 8 7/8% notes due 2025 rose ¾ point to close at 78 bid. The 5 7/8% notes due 2025 also improved by ¾ point to close at 86 bid.

On Wednesday, news broke that the Phoenix-based pet supplies retailer achieved 51% creditor support to pass a loan amendment it proposed last week.

A central part of the amendment restricts the company on how much new debt it can take on and limits creditors’ ability to pursue legal action over its private equity transfer of a large stake of e-commerce segment Chewy.com.

It also restricts the company’s ability to monetize the private portion of that stake.

Camp Hill, Penn.-based sector peer Rite Aid’s paper declined.

The 6 1/8% paper due 2023 fell ½ point to close at 81¼ bid.

The drugstore chain is feeling market pressure after competitor Walgreens reported revenue declines that it blamed on industry weakness.

Weatherford drops

Elsewhere, in oil and gas, Weatherford’s notes saw a drop, traders said.

The 5 1/8% notes due 2020 lost 6½ points to close at 81¼ bid. The 8¼% notes due 2023 gave back 3 points to close at 69½ bid.

“If oil drops then that means less spending on new projects for them to work on,” a trader said. “But that can’t be the whole story. There’s got to be something else driving this that we haven’t seen yet. It could be as simple as people taking their money out.”

At the end of Thursday trading, West Texas Intermediate crude-oil futures for May delivery lost 36 cents to close at $62.10 per barrel.

North Sea Brent crude-oil futures for June delivery, however, ended slightly higher at $69.40 per barrel after rising 9 cents.

Oil names mixed

Elsewhere in the energy sector, mixed oil futures led to similar non-uniform trading for distressed oil tranches, market sources said.

Los Angeles-based independent oil and gas producer California Resources’ issues were negative.

The 8% notes due 2022 lost 1 point to close at 81 bid.

London-based contract driller Ensco’s paper finished mixed.

The 7.2% paper due 2027 fell 1 point to close at 81½ bid. The 7¾% paper due 2026 picked up 1 point to close at 86¾ bid.

Houston-based producer Halcon’s notes were on the rise.

The 6¾% notes due 2025 tacked on 1 point to close at 65 bid.

Hexion also mixed

Hexion’s issues saw mixed results in the session, traders said.

The 6 5/8% notes due 2020 added ¾ point to close at 82½ bid. The 10% notes due 2020 shaved off ¾ point to close at 81 bid.

Throughout the week, the Columbus, Ohio-based chemical producer’s structure has seesawed since its Monday bankruptcy filing.

A proposed restructuring plan would allocate $1.45 billion for a cash payout to first-lien holders.

Intelsat positive

Telecom name Intelsat’s paper extended a positive run, market sources said.

Intelsat Jackson Holdings SA’s 5½% paper due 2023 edged up ¼ point to close at 90 bid. Intelsat (Luxembourg) SA’s 8 1/8% paper due 2023 picked up 3¾ points to close at 77¼ bid.

The Luxembourg-based satellite operator received a boost on Wednesday after a JPMorgan analyst upgraded the company and its common stock, arguing that it was undervalued after recent turmoil surrounding potential control of the C-band spectrum.

© 2015 Prospect News.
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