Occidental notes lower amid proxy fight, ratings cut; PG&E better in utilities sector

By James McCandless

San Antonio, March 23 – The distressed debt space saw more negativity to start the week with a focus on the oil and gas sector.

Occidental Petroleum Corp.’s notes lost ground as the company negotiates with an activist investor over board seats and received a ratings downgrade.

The 2.7% senior notes due 2022 fell 2˝ points to close at 60˝ bid. The 3.5% senior notes due 2029 dived 6˝ points to close at 51 bid.

Over the weekend, a running dispute that the Houston-based independent oil and gas producer has had with activist investor Carl Icahn appeared to be abating as the two sides were reportedly nearing an agreement.

Icahn, who has been applying pressure on the company to improve its operations and change its executive makeup, is expected to be given three new board seats.

The investor owns a 10% stake in the company.

Early Monday, Fitch Ratings downgraded the company’s long-term issuer default rating and put all other ratings on negative watch.

Elsewhere, in utilities, PG&E Corp.’s notes saw a better day as the company agreed to plead guilty to involuntary manslaughter resulting from a wildfire sparked by the company’s equipment.

The 6.05% senior notes due 2034 added 1 point to close at 90˝ bid.

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