GTT Communications notes improve as interim CEO named; PG&E eyed post-bankruptcy

By James McCandless

San Antonio, July 6 – Distressed debt trading focused on newsmakers in telecom and utilities spaces on Monday.

GTT Communications, Inc.’s notes improved after the company announced the appointment of an interim chief executive officer.

Sector peer Frontier Communications Corp.’s issues were under pressure.

Meanwhile, utilities provider PG&E Corp.’s paper varied in direction in the aftermath of its bankruptcy exit.

In the travel sector, American Airlines Group Inc.’s notes were carried higher while United Airlines Holdings, Inc.’s issues diverged as airlines grapple with increases in coronavirus cases.

Amid a slight dip in oil futures, Whiting Petroleum Corp.’s issues weakened while Denbury Resources Inc.’s and Occidental Petroleum Corp.’s paper saw mixed activity.

Car renter Hertz Global Holdings, Inc.’s notes saw gains after receiving a positive note from an analyst as it wrangles with creditors over its used car inventory.

GTT up, Frontier down

GTT Communications’ notes improved at the end of the afternoon, traders said.

The 7 7/8% senior notes due 2024 picked up ¾ point to close at 53½ bid.

Early Monday, the McLean, Va.-based cloud networking company announced that it had named chief revenue officer Ernie Ortega as interim CEO while the company conducts a search for a permanent replacement.

The company announced the departure of Richard Calder, the previous CEO, in late May.

In its most recent earnings report shown in May, GTT reported a loss per share of 79 cents, wider than the 26 cents per share loss that analysts had estimated.

Revenues were just shy of predictions at $424.7 million.

Norwalk, Conn.-based wireline communicator Frontier’s issues were under pressure.

The 10½% senior notes due 2022 shaved off ½ point to close at 33 bid.

PG&E flat to higher

Meanwhile, utilities provider PG&E’s paper varied in direction, market sources said.

The 2.1% notes due 2027 held level at 99¾ bid. The 2.5% notes due 2031 tacked on ¼ point to close at 99½ bid.

The San Francisco-based electric utility emerged from its prolonged bankruptcy process last Wednesday, completing its restructuring process and implementing the plan of reorganization with the green light from its bankruptcy judge.

As part of its exit, the newly established Fire Victim Trust has been funded to satisfy claims of individual wildfire victims and others.

The payment schedule for the trust calls for payments of $5.4 billion in cash and shares representing 22.19% of PG&E’s common stock on the plan effective date of July 1; $1.35 billion in cash in two installments in 2021 and 2022; and certain other rights.

“I think the best indicator of the risk to the structure is what happens in the next wildfire,” a trader said.

Airlines eyed

In the travel sector, American Airlines’ notes were carried higher, traders said.

The 5% senior notes due 2022 gained ¼ point to close at 60¼ bid. The 3¾% senior notes due 2025 added ½ point to close at 48½ bid.

As the Fort Worth-based airline grapples with lower revenues amid the coronavirus pandemic, it forecasted late last week that international flight capacity would likely be reduced by 25% in 2021.

An expected decrease in demand led the company to scrap some international routes.

The airline also said that it may be overstaffed by about 8,000 and that employees should expect layoffs.

Despite an increase in Covid-19 cases in the last month, American expects to fill its planes to capacity.

Chicago-based peer United Airlines’ issues diverged.

The 5% senior notes due 2024 grabbed 2¾ points to close at 84½ bid. The 4¼% senior notes due 2022 shed 88¼ bid.

Oil names mixed

Amid a slight dip in oil futures, distressed energy names finished with differing results, market sources said.

West Texas Intermediate crude oil futures for August delivery were docked 2 cents to settle at $40.63 per barrel.

North Sea Brent crude oil futures for September delivery closed the day at $43.10 per barrel after giving up 4 cents.

Denver-based producer Whiting Petroleum’s paper weakened.

The 6¼% senior notes due 2023 moved down ¾ point to close at 21 bid. The 6 5/8% senior notes due 2026 trailed by 2¼ points to close at 19¾ bid.

Plano, Tex.-based independent oil and gas producer Denbury Resources’ notes saw mixed activity.

The 5½% senior subordinated notes due 2022 slid 4½ points to close at 3 bid. The 9% notes due 2021, despite pushing as high as 43 bid, closed level at 41 bid.

Houston-based producer Occidental Petroleum’s issues also differed in direction.

The 2.9% senior notes due 2024 jumped up 3¼ points to close at 89¾ bid. The 2.7% senior notes due 2022 fell ¼ point to close at 94¾ bid.

Hertz gains

Car renter Hertz’s paper saw gains as the session ended, traders said.

The 6¼% senior notes due 2022 gained 3¼ points to close at 35½ bid. The 5½% senior paper due 2024 reached up 2½ points to close at 35½ bid.

In the back half of last week, the Estero, Fla.-based vehicle rental name received an analyst upgrade based on the expected conditions of the used car market.

Hertz is involved in a dispute with its lenders about how to handle its fleet of 494,000 cars during the bankruptcy process.

© 2015 Prospect News.
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