PG&E eyed as creditors dispute restructuring plan; PetSmart better after unit’s earnings

By James McCandless

San Antonio, Dec. 12 – The distressed debt space on Thursday saw more focus around recent newsmakers.

PG&E Corp.’s notes were active but flat as a large creditor publicly stated its opposition to the company’s restructuring plan.

Retailer PetSmart Inc.’s issues moved better in the days after the release of a subsidiary’s earnings results.

Sector peer Bed Bath & Beyond Inc.’s paper declined by the close.

Meanwhile, Diebold Nixdorf, Inc.’s notes spiked after the company reaffirmed its end-of-year guidance and provided 2020 and 2021 guidance.

Better performing oil futures begot similar movements for Chesapeake Energy Corp.’s, Antero Resources Corp.’s and Southwestern Energy Co.’s issues.

Satellite operator Intelsat SA’s paper diverged in the telecom space while Frontier Communications Corp.’s notes trended upward.

PG&E active, level

PG&E’s notes were active throughout the session but closed the day flat, traders said.

The 6.05% notes due 2034 went unchanged at 106 bid.

In all, $25 million of the notes were on the tape by the close.

On Thursday, one of the San Francisco-based bankrupt electric utility’s largest creditors publicly announced its opposition to the company’s restructuring plan after lobbying the governor to reject the plan.

Elliott Management said that the plan is not in the best interest of stakeholders, customers and California residents, arguing that its $10 billion in planned new debt would lead to its reclassification as a “sub-investment grade, junk-bond issuer.”

The private equity firm went on to say that its alternative plan would lead to the best outcome and put the name in a better financial position upon its exit from bankruptcy.

On Friday, California governor Gavin Newsom is supposed to approve or reject PG&E’s $13.5 billion settlement with wildfire victims.

“I don’t think there’s much they can get out of this,” a trader said. “They just want to make some noise.”

PetSmart better

Retailer PetSmart’s issues moved into better territory, market sources said.

The 8 7/8% senior notes due 2025 gained 1 point to close at 97 bid. The 5 7/8% senior notes due 2025 inched up ¼ point to close at 101 bid.

Earlier in the week, Chewy.com, a subsidiary of the Phoenix-based pet supplies name, reported earnings for the third quarter.

The company reported a loss of 20 cents per share, wider than the expected 16 cents per share loss.

The focus fell on sales, which came in above estimates at $1.23 billion.

Early this year, the company was embroiled in a dispute with creditors over a private equity transfer of the e-commerce segment.

Union, N.J.-based sector peer Bed Bath & Beyond’s long-term paper declined.

The 5.165% senior notes due 2044 dipped 2 points to close at 70¼ bid. The 4.915% senior paper due 2034 shed 2¾ points to close at 74 bid.

Diebold spikes

Meanwhile, Diebold’s notes shot up on Thursday, traders said.

The 8½% senior notes due 2024 jumped 6¾ points to close at 91¼ bid.

The North Canton, Ohio-based connected commerce solutions company reaffirmed its end-of-year guidance and released guidance for 2020 and 2021.

The company said that by the end of 2019, it expects to rack up $4.4 billion in revenue and an EBITDA between $400 million and $410 million.

For 2020, Diebold projects revenue to land between $4.2 billion and $4.3 billion, while for 2021 it sees revenue growth in the 2% to 4% range.

Oil rises

As oil futures climbed, distressed energy names moved similarly, market sources said.

West Texas Intermediate crude oil futures for January delivery improved by 42 cents to end the day at $59.18 per barrel.

North Sea Brent crude oil futures for February delivery closed at $64.20 per barrel after a 48 cent gain.

Oklahoma City-based independent oil and gas producer Chesapeake Energy’s issues improved.

The 8% senior notes due 2025 garnered ½ point to close at 58½ bid. The 8% senior notes due 2027 rose 1½ points to close at 61½ bid.

Denver-based producer Antero Resources’ paper followed the sector trend.

The 5 1/8% senior notes due 2022 gained ¾ point to close at 91¼ bid. The 5 5/8% senior paper due 2023 improved by 3½ points to close at 83 bid.

Spring, Tex.-based peer Southwestern Energy’s notes tracked higher.

The 6.2% senior notes due 2025 tacked on 4 points to close at 90 bid. The 7¾% senior notes due 2027 hopped up 5 points to close at 90½ bid.

Intelsat flat to lower

Satellite operator Intelsat’s issues diverged in the telecom space, traders said.

Intelsat (Luxembourg) SA’s 8 1/8% senior notes due 2023 held level at 47¾ bid. The 9½% senior notes due 2023 shaved off ¾ point to close at 60¾ bid.

Despite lobbying from the Luxembourg-based satellite operator, the stage is set for the U.S. government to hold a public auction for C-band spectrum in the coming year.

The Senate Commerce Committee is working on legislation that sets the parameters for the auction.

Norwalk, Conn.-based wireline communications name Frontier’s paper moved up.

The 10½% senior notes due 2022 picked up ½ point to close at 46½ bid. The 11% senior notes due 2025 also rose ½ point to close at 46½ bid.

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