PG&E notes trade lower amid more power blackouts; Teva paper declines in pharma space

By James McCandless

San Antonio, Oct. 24 – The distressed debt market spent the Thursday session focused on the utilities and pharma sectors.

PG&E Corp.’s notes shifted lower amid another round of mass power cuts as the company tries to avoid another wildfire.

In the pharma space, Teva Pharmaceutical Industries Ltd.’s issues declined as the company continues to work on a settlement for opioid claims against it.

Sector peer Endo International plc’s paper also fell.

Meanwhile, energy name Range Resources Corp.’s notes continued to move higher a few days after announcing asset sales and a share buyback.

A positive day for oil futures served as the backdrop for rises in Whiting Petroleum Corp.’s, Superior Energy Services, Inc.’s and Chaparral Energy, Inc.’s issues.

Chemicals name Chemours Co.’s notes ended on better footing.

Retailer Rite Aid Corp.’s notes were active but unchanged during Thursday trading activity.

PG&E weakens

PG&E’s notes were seen shifting lower on Thursday, traders said.

The 6.05% notes due 2034 dipped 1½ points to close at 110¼ bid.

About $37 million of the notes traded.

Over the last few days, the San Francisco-based bankrupt electric utility said that it would be cutting power to hundreds of thousands of customers in sections of Northern California.

The temporary power outages are the second round of efforts to prevent more wildfires, which drove the company into bankruptcy after accruing billions in liabilities from 2017 and 2018 forest fires.

At the same time, the utility is engaged in a prolonged tussle with its creditors over a restructuring plan.

After pushing its restructuring plan in bankruptcy court, a judge allowed a consortium of various stakeholders to submit a competing plan.

Teva, Endo lower

In the pharma space, Teva’s issues declined, market sources said.

The 6¾% senior notes due 2028 shaved off ¼ point to close at 90¼ bid. The 2.8% senior notes due 2023 fell 1 point to close at 87 bid.

On Thursday, reports indicated that while the Petach Tikva, Israel-based generic drug producer has struck a tentative deal to settle all opioid-related claims against it, scrutiny from legal challengers may alter the terms.

The current framework calls for the company to donate medicine it values at $23 billion over the next 10 years along with a cash payment of $250 million.

“Of course, some people think that’s not enough money,” a trader said. “I think when the final deal comes through we could see more money upfront.”

Dublin-based sector peer Endo’s paper also fell.

The 6% senior notes due 2023 lost 1¾ points to close at 66¼ bid.

Range Resources higher

Meanwhile, Range Resources’ notes moved higher, traders said.

The 4 7/8% senior notes due 2025 picked up 1 point to close at 80¾ bid.

The Fort Worth-based independent oil and gas producer has seen heightened attention after announcing increased bank commitments of $2.4 billion.

The company also reported $150 million from a recent asset sale and a $100 million share repurchase program.

S&P Global Ratings has placed the company’s ratings under review.

Oil names rise

As oil futures rose, the movement provided a backdrop for similar movements for energy names, market sources said.

West Texas Intermediate crude oil futures for December delivery added 26 cents to settle at $56.23 per barrel.

North Sea Brent crude oil futures for December delivery finished at $61.67 per barrel after a 50 cent pickup.

Denver-based producer Whiting Petroleum’s issues followed futures upward.

The 6¼% senior notes due 2023 garnered ½ point to close at 77¼ bid. The 6 5/8% senior notes due 2026 improved by ¼ point to close at 66¾ bid.

Houston-based oilfield services provider Superior Energy’s paper was also positive.

The 7 1/8% senior notes due 2021 rose ¾ point to close at 76½ bid. The 7¾% senior paper due 2024 jumped up 2¼ points to close at 56¾ bid.

Oklahoma City-based peer Chaparral Energy’s notes followed the sector’s trend.

The 8¾% senior notes due 2023 gained ½ point to close at 42½ bid.

Chemours better

Chemicals name Chemours’ issues ended the day on better footing, traders said.

The 5 3/8% senior notes due 2027 garnered ¾ point to close at 89¼ bid.

The Wilmington, Del.-based chemicals producer came into focus on Wednesday after a former DuPont executive commented on the company’s liabilities in a court filing.

Ellen Kullman, who was chairman and chief executive officer of DuPont when Chemours was spun off in 2015, said that the company was never meant to carry the burden of unlimited liabilities from its former parent.

Chemours is suing DuPont over accusations that it misled the company about the extent of the liabilities it would face over recent environmental hazards.

Rite Aid flat

Retailer Rite Aid’s paper was active but finished flat, market sources said.

The 6 1/8% senior notes due 2023 held level at 85¾ bid.

Over the last week, the Camp Hill, Pa.-based drug store name has received two ratings downgrades and one upgrade as a result of two discounted tender offers for 2027 and 2028 paper.

Moody’s Investors Service and S&P both called the move a distressed exchange.

© 2015 Prospect News.
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