PG&E bonds lower on insurance settlement news; Mallinckrodt better in pharma space

By James McCandless

San Antonio, Sept. 13 – The distressed debt space saw moderate volume to close the week, with newsmakers leading the way.

PG&E Corp.’s notes headed lower after announcing an $11 billion insurance settlement over wildfire claims.

The 6.05% notes due 2034 fell ¼ point to close at 110 bid.

The notes saw about $86 million changing hands by the close.

Early Friday, news broke that the San Francisco-based bankrupt electric utility had reached a settlement with insurance carriers over subrogation claims related to 2017 and 2018 wildfires.

The company committed to pay out $11 billion to insurance companies that have paid out claims to victims to recoup those payments.

The settlement has yet to be approved in bankruptcy court.

Elsewhere, pharma name Mallinckrodt plc’s issues improved as it capped off a tumultuous week filled with restructuring talk and ratings downgrades.

The 5 5/8% senior notes due 2023 garnered 1¾ points to close at 37 bid. The 5¾% senior notes due 2022 added 2 points to close at 44 bid.

This week, the Staines-upon-Thames, England-based drug name announced that it would sell its contract drug manufacturing unit to a private equity firm for $250 million.

The company is considering a restructuring as it faces myriad lawsuits related to its alleged role in the opioid epidemic.

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