Frontier Communications notes head lower; PG&E paper improves amid stakeholder dispute

By James McCandless

San Antonio, Oct. 8 – The distressed debt market spent Tuesday with attention paid to the telecom and energy sectors.

Frontier Communications Corp.’s notes traded down, dominating the distressed space as the market anticipates a restructuring plan.

Sector peer Intelsat SA’s issues were also under pressure.

In utilities, PG&E Corp.’s paper trended higher as the company, creditors and other stakeholders argue over its restructuring plan.

Tire name Titan International, Inc.’s notes declined after the company announced the sale of a part of its stake in an Indian company.

Oil futures were negative, spurring declines for Chesapeake Energy Corp.’s, Nabors Industries Ltd.’s and Transocean Ltd.’s issues.

Elsewhere, in pharma, Teva Pharmaceutical Industries Ltd.’s and Mallinckrodt plc’s paper varied in direction.

Frontier, Intelsat down

Frontier’s notes were seen lower in Tuesday’s session, traders said.

The 10½% senior notes due 2022 shaved off ¼ point to close at 48¼ bid. The 11% senior notes due 2025 fell 1½ points to close at 47¼ bid.

The two notes combined to see about $36 million trading.

While there was no news about the Norwalk, Conn.-based wireline communications company, the market continues to anticipate the release of a restructuring plan.

“There was nothing out today but it continues to be topical,” a trader said. “There are some that are pushing for bankruptcy and others that want something out of court.”

Major stakeholders have warned the company that a bankruptcy would not be in their best interest.

Luxembourg-based satellite operator Intelsat’s issues were also under pressure as the session ended.

Intelsat Jackson Holdings SA’s 5½% senior notes due 2023 lost ¼ point to close at 93¾ bid. Intelsat (Luxembourg) SA’s 8 1/8% senior notes due 2023 declined by ½ point to close at 82 bid.

PG&E higher

In the utilities space, PG&E’s paper trended higher, market sources said.

The 6.05% notes due 2034 gained ¾ point to close at 110 bid.

About $17 million was on the tape by the close.

As a decision on whether the San Francisco-based bankrupt electric utility gets to keep the exclusive right to move forward on a restructuring plan draws near, a competing plan sponsored by various stakeholders seeks to challenge the company on how much it owes wildfire victims.

The company’s proposal would cap victim payouts at $8.4 billion, while a group comprised of creditors, wildfire victims and others are pushing for $13.5 billion.

Last Friday, PG&E said that it was ready to enact its restructuring plan with $34.35 billion in debt financing commitments.

A judge in bankruptcy court will decide on whether to terminate the company’s exclusive right later in the month.

Titan declines

Meanwhile, auto name Titan International’s notes were in decline, traders said.

The 6½% senior secured notes due 2023 dipped ¾ point to close at 80 bid.

After the close on Monday, the Quincy, Ill.-based tiremaker announced that it has completed the sale of 10.4% of its stake in Wheels India.

The sale is worth $19 million.

The company will continue to own a 23.8% stake.

In a press release, the company said that the move would help the company strengthen its balance sheet.

Oil negative

Another negative day for oil futures spurred similar movements in energy tranches, market sources said.

West Texas Intermediate crude oil futures for November delivery lopped off 12 cents to settle at $52.63 per barrel.

North Sea Brent crude oil futures for December delivery finished at $58.24 per barrel after an 11 cent loss.

Oklahoma City-based independent oil and gas producer Chesapeake Energy’s issues followed futures downward.

The 8% senior notes due 2025 lost ¾ point to close at 66½ bid. The 8% senior notes due 2027 gave back 1½ points to close at 64½ bid.

Bermuda-based driller Nabors’ paper also closed weaker.

The 5½% senior notes due 2023 declined ¾ point to close at 75¾ bid.

Steinhausen, Switzerland-based contract driller Transocean’s longer-term notes moved lower.

The 9.35% senior notes due 2041 declined by 3¾ points to close at 63 bid. The 6.8% senior notes due 2038 moved 1¼ points lower to close at 56 bid.

Teva, Mallinckrodt active

Elsewhere, in pharma, Teva’s issues varied throughout the day, traders said.

The 3.15% senior notes due 2026 were unchanged at 70½ bid. The 4.1% senior notes due 2046 fell 2¼ points to close at 64½ bid.

As the Petach Tikva-based drug producer and others in the space wrangle with how to handle the thousands of legal challenges over opioid-related claims, many companies are considering blanket settlements modeled after the one reached by Purdue Pharma.

Some companies are exploring ways to join Purdue’s settlement outright.

Staines-upon-Thames, England-based sector peer Mallinckrodt’s paper also saw diverging movements.

The 5¾% senior notes due 2022 improved by ½ point to close at 34 bid. The 5½% senior notes due 2025 declined by ½ point to end at 27½ bid.

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