PG&E bonds better on potential tax news; Mallinckrodt gains as company touts debt cut

By James McCandless

San Antonio, Jan. 13 – The Monday session in the distressed debt space saw a focus on newsmakers in the utilities and pharmaceutical sectors.

PG&E Corp.’s notes saw better movement as news broke of a potential for the company to save hundreds of millions of dollars in taxes.

The 6.05% notes due 2034 picked up 2 points to close at 109½% bid.

By the close, the 6.05% notes saw about $344 million change hands.

The elevation in trading levels in the San Francisco-based bankrupt electric utility was sparked by news that the company stands to save about $470 million in taxes.

In a late Friday filing with the Securities and Exchange Commission, PG&E said that much of its wildfire recovery and prevention work that is included in its $1.68 billion settlement with California could be deducted from state and federal taxes.

In the pharma space, Mallinckrodt plc’s issues gained ground as the company highlighted its debt reduction efforts at a conference.

The 4 7/8% senior notes due 2020 jumped up 4 points to close at 73½ bid. The 5¾% senior notes due 2023 added ½ point to close at 38½ bid.

On Monday, chief executive officer Mark Trudeau touted the Dublin-based drugmaker’s debt reduction efforts in 2019 and signaled for further cuts in 2020.

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