PG&E notes rebound from recent negativity; Intelsat active after earnings report

By James McCandless

San Antonio, Oct. 29 – As utilities continued to be at the forefront of distressed debt trading, names with earnings news siphoned off some of the attention.

PG&E Corp.’s notes bounced back from recent lows stemming from negative press surrounding power outages and wildfires.

In telecom, Intelsat SA’s issues varied after the company released its uneven third-quarter earnings report.

Sector peer Frontier Communications Corp.’s paper moved downward.

Meanwhile, Diebold Nixdorf, Inc.’s notes dropped after disappointing with its own earnings for the third quarter.

In oil and gas, McDermott International, Inc.’s issues trailed as it received another ratings downgrade.

On a down day for oil futures, Extraction Oil & Gas, Inc.’s and Chesapeake Energy Corp.’s paper declined as Antero Resources Corp.’s notes gained.

Elsewhere, WeWork Cos. Inc.’s issues lost as a ratings agency nixed a negative outlook on the name.

PG&E bounces

PG&E’s notes bounced off of recent declines, traders said.

The 6.05% notes due 2034 jumped up 5½ points to close at 95¾ bid. The 3½% senior notes due 2020 garnered 4¼ points to close at 90½ bid.

The two tranches combined to see about $150 million on the tape by the close.

After two trading days of declines, the San Francisco-based bankrupt electric utility’s notes were rising off of recent lows sparked by the company’s latest round of customer power blackouts.

Combined with worries that a malfunctioning transformer could have ignited the latest wildfire plaguing Northern California, the name has seen nothing but negative headlines.

“This is a correction,” a trader said. “But I don’t know how quickly it will recover, especially if it’s proven that they started the fire.”

Intelsat notes active

In the telecom space, Intelsat’s issues varied, market sources said.

Intelsat Jackson Holdings SA’s 5½% senior notes due 2023 gained ½ point to close at 95 bid. Intelsat (Luxembourg) SA’s 8 1/8% senior notes due 2023 fell 2 points to close at 84¼ bid.

By the end of the afternoon, about $39 million of the notes traded.

Early Tuesday, the Luxembourg-based satellite operator released its earnings results for the third quarter.

The company reported an earnings loss of $1.05 per share, wider than the $1 loss per share that was expected by analysts.

On the other side of the spectrum, it also reported revenues at $506.66 million, better than what was predicted.

Also on Tuesday, the company joined with other members of the C-Band Alliance to propose clearing 300 MHz of midband spectrum for reuse in the 5G network.

Norwalk, Conn.-based wireline telecom Frontier’s paper moved downward.

The 10½% senior paper due 2022 shaved off ¾ point to close at 48 bid. The 11% senior notes due 2025 dipped 1 point to close at 47½ bid.

Diebold drops

Meanwhile, Diebold’s notes were seen dropping during the session, traders said.

The 8½% senior notes due 2024 dived 5½ points to close at 87 bid.

The North Canton, Ohio-based connected commerce solutions name was another to release third-quarter results this morning, yielding disappointing results.

Earnings per share were pegged at a loss of 6 cents and revenues were shy of expectations at $1.08 billion.

“It’s missed more quarters than it’s hit,” a trader said. “How long they can keep that up?”

McDermott trails

In oil and gas, McDermott’s issues trailed, market sources said.

The 10 5/8% senior notes due 2024 slid ¾ point to close at 18½ bid.

The Houston-based oil and gas engineering name saw its second ratings downgrade in as many days, this time from Moody’s Investors Service.

Prompted by the news of a new $1.7 billion in additional financing, the agency lowered its overall rating, probability of default rating and two issue-level ratings.

On Monday, S&P Global Ratings issued similar downgrades.

Oil futures slip

A negative move in oil futures was mirrored by distressed energy names, traders said.

West Texas Intermediate crude oil futures for December delivery lost 27 cents to settle at $55.54 per barrel.

North Sea Brent crude oil futures for December delivery finished at $61.59 per barrel after inching up 2 cents.

Denver-based independent oil and gas producer Extraction Oil & Gas’ paper declined.

The 7 3/8% senior paper due 2024 lost 3¼ points to close at 49¾ bid. The 5 5/8% senior notes due 2026 dipped 5¼ points to close at 45½ bid.

Oklahoma City-based oil and gas producer Chesapeake Energy’s notes saw similar movements.

The 8% senior notes due 2025 gave back 1¾ points to close at 68½ bid. The 8% senior notes due 2027 declined by 2½ points to close at 65¼ bid.

Denver-based peer Antero Resources’ issues went against the sector trend.

The 5 5/8% senior notes due 2023 garnered 2½ points to close at 78 bid. The 5 3/8% senior notes due 2021 shot up 3¾ points to close at 94½ bid.

WeWork dips

Elsewhere, WeWork’s paper edged lower, market sources said.

The 7 7/8% senior notes due 2025 slipped ¼ point to close at 84½ bid.

On Tuesday, Fitch Ratings said that it had removed the negative outlook from the New York-based coworking company.

The agency said that the move was predicated by the recent announcement of an $8 billion rescue financing package from SoftBank, noting that its ratings could be downgraded if the deal or something equivalent was nixed.

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