PG&E up amid state probe results; McDermott higher despite ratings downgrade

By James McCandless

San Antonio, Dec. 3 – The distressed debt market put its focus into names in the utilities and energy sectors.

PG&E Corp.’s notes moved up as a California report stated that the company did not do all it could to prevent recent wildfires.

The 6.05% notes due 2034 added ¼ point to close at 106 bid.

On Tuesday, California state investigators said that the San Francisco-based bankrupt electric utility failed to maintain and inspect its transmission systems properly, which led to the ignition of a large-scale wildfire last year.

The fire was the proverbial straw that broke the company’s back, filing for bankruptcy early in 2019 with an estimated $30 billion in potential liabilities.

The investigators went on to say that the utility exhibited a pattern of inadequate inspection and maintenance practices.

PG&E said that it accepts the report’s conclusions.

Meanwhile, in energy, McDermott International, Inc.’s issues ended higher despite receiving a ratings downgrade.

The 10 5/8% senior notes due 2024 tacked on ¼ point to close at 7¾ bid.

Early in the Tuesday session, S&P Global Ratings issued a downgrade for the Houston-based oil and gas engineering company.

The agency lowered its overall rating to SD from CC and the rating on its notes to D from C.

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