PG&E notes rise as company files amended plan; Chesapeake gains amid delisting warning

By James McCandless

San Antonio, Dec. 13 – Activity in the distressed debt market focused largely on the utilities and energy sectors on Friday.

PG&E Corp.’s notes saw better movement after the company filed an amended reorganization plan in bankruptcy court.

In oil and gas, Chesapeake Energy Corp.’s notes gained amid news that the company has received a delisting notice for its common stock.

As oil futures improved, California Resources Corp.’s and Oasis Petroleum Inc.’s paper followed as Whiting Petroleum Corp.’s notes varied.

Chemicals name Chemours Co.’s issues were under pressure as it receives a ratings downgrade on Friday.

Elsewhere, Diebold Nixdorf, Inc.’s notes continued to rise on the back of its release of its guidance over the next two years.

The telecom sector saw Intelsat SA’s notes dip as Frontier Communications Corp.’s issues diverged.

PG&E better

PG&E’s notes improved on Friday, traders said.

The 6.05% senior notes due 2034 added ¼ point to close at 106¼ bid.

Late Thursday, the San Francisco-based bankrupt electric utility filed an amended plan of reorganization with the U.S. Bankruptcy Court for the Northern District of California to reflect settlements with all major groups of wildfire claimants, Prospect News reported.

The company said the amended plan satisfies California regulations with $13.5 billion in compensation for wildfire victims and some limited public entities and $11 billion for insurance subrogation claimants.

It also said that the plan keeps it on track to participate in the state’s new wildfire fund by the June 30, 2020 deadline.

Also on Thursday, large creditor Elliott Management announced its opposition to PG&E’s restructuring plan, offering its own plan that it says would better serve stakeholders.

Chesapeake up

In the oil and gas space, Chesapeake Energy’s issues were gaining, market sources said.

The 8% senior notes due 2025 rose ½ point to close at 59 bid. The 8% senior notes due 2027 picked up ½ point to close at 62 bid.

The Oklahoma City-based independent oil and gas producer’s issues were rising despite news late in the day that the company received a delisting notice for its common stock from the New York Stock Exchange.

To regain compliance, the company said that it would execute a plan to reduce capital expenditures by 30%, hold asset sales and capital market transactions to reduce debt and make a potential reverse stock split.

This week, the company completed a $1.5 billion term loan facility.

Oil improves

Oil futures anchored by trade news led to improving distressed energy names, traders said.

Futures rose on news of a preliminary trade deal struck by the United States and China.

West Texas Intermediate crude oil futures for January delivery popped up 89 cents to settle at $60.07 per barrel.

North Sea Brent crude oil futures for February delivery finished at $65.22 per barrel after a $1.02 rise.

Los Angeles-based producer California Resources’ paper followed the direction of futures.

The 6% senior notes due 2024 tacked on 1 point to close at 30 bid. The 8% senior secured paper due 2022 improved by ½ point to close at 37½ bid.

Houston-based sector peer Oasis Petroleum’s notes followed the trend.

The 2.625% senior notes due 2023 garnered 1¼ points to close at 72½ bid. The 6¼% senior notes due 2026 shot up 2¾ points to close at 80¼ bid.

Denver-based producer Chesapeake Energy’s issues varied in direction.

The 6¼% senior notes due 2023 added 1¾ points to close at 77 bid. The 6 5/8% senior notes due 2026 shaved off ¾ point to close at 64¾ bid.

Chemours lower

Chemicals name Chemours’ paper was under pressure, market sources said.

The 5 3/8% senior notes due 2027 lost ¼ point to close at 86 bid.

On Friday, the Wilmington, Del.-based chemicals producer received a downgrade from S&P Global Ratings.

The agency lowered the company’s issuer credit rating and issue-level ratings, reflecting its expectation that the company’s credit metrics will remain weak in 2020 due to loss of market share.

Diebold gains

Elsewhere, Diebold’s notes continued to rise to cap off the week, traders said.

The 8½% senior notes due 2024 rose 3¼ points to close at 94½ bid.

On Thursday, the notes jumped up 6¾ points.

The spike was preceded by the North Canton, Ohio-based connected commerce solutions company’s announcement that, in a revised guidance, it expects to garner $4.4 billion in revenue by the end of 2019.

For 2020, it expects $4.2 billion to $4.3 billion in revenue and a 2% to 4% rise in revenue for 2021.

Intelsat dips

In the telecom sector, Intelsat’s issues dipped, market sources said.

Intelsat (Luxembourg) SA’s 8 1/8% senior notes due 2023 declined by ¾ point to close at 47 bid. The 9½% senior notes due 2023 fell 1¼ points to close at 59½ bid.

The Luxembourg-based satellite operator’s structure spent another week amid the top traders in the sector as the company prepares for an auction of C-band spectrum in 2020, though it lost a lobbying effort to keep the auction private.

U.S. regulators are working to set terms for a public auction.

Norwalk, Conn.-based wireline name Frontier’s paper was flat to higher.

The 10½% senior notes due 2022 held level at 46½ bid. The 11% senior paper due 2025 gained ½ point to close at 47 bid.

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