PG&E notes trade higher despite wildfire pressure; California Resources paper improves

By James McCandless

San Antonio, Nov. 4 – The distressed debt space began a new week with a continued focus on utilities and energy names.

PG&E Corp.’s notes moved higher despite more pressure concerning its role in recent wildfires in California.

The 6.05% notes due 2034 improved by 2 points to close at 104 bid.

On Monday, a federal judge has ordered the San Francisco-based bankrupt electric utility to answer questions on the possibility that its faulty equipment sparked the latest wildfire plaguing northern California.

The company said that it would respond to the judge’s questions by Nov. 29.

As new wildfires persist, the utility is facing increasing pressure, with California governor Gavin Newsom threatening a government takeover if it cannot reach a restructuring deal soon.

“If he’s serious, then that might speed up the timeline for a deal to be reached between the bondholders and shareholders,” a trader said.

Meanwhile, in oil and gas, California Resources Corp.’s issues gained in the wake of its third-quarter earnings release.

The 6% senior notes due 2024 rose 2¾ points to close at 29 bid. The 8% senior secured notes due 2022 picked up 2¼ points to close at 43¾ bid.

The Los Angeles-based independent oil and gas producer’s structure has been improving since the release of its third-quarter earnings late Thursday.

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