PG&E notes drop amid wildfire worries; WeWork trades higher as rescue funding detailed

By James McCandless

San Antonio, Oct. 25 – The distressed debt space capped the week with much of the trading volume focusing on newsmakers in the utilities and pharma sectors.

PG&E Corp.’s notes were seen dropping as a California wildfire spreads and the company cuts power to thousands.

The 6.05% notes due 2034 shed 5¾ points to close at 104½ bid. The 3.3% senior notes due 2027 fell 2¾ points to close at 96 bid.

By the end of the day, the two tranches combined to see about $138 million trading.

On Friday, the San Francisco-based bankrupt electric utility’s structure was under pressure as a wildfire spreads in California.

As the market pondered on whether the most recent wildfire is to blame on the company’s equipment, analysts said that the prospect could wipe out shareholder value and put its bankruptcy process in jeopardy.

“If they get blamed, that’s just more money they have to pay,” a trader said.

Meanwhile, WeWork Cos. Inc.’s issues fared better as details of its rescue financing package from SoftBank are released.

The 7 7/8% senior notes due 2025 gained 1 point to close at 84¼ bid.

Meanwhile, United States Steel Corp.’s issues were lifted as the company raises the price on a segment of its products.

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