Dynegy zooms on possible Vistra takeover; Intelsat off slightly; energy up with oil

By Paul Deckelman

New York, May 19 – Traders in distressed debt said that most issues were firmer on Friday, in line with a general upturn in the broader high-yield bond market.

The big winner of the day was Dynegy Inc.’s bonds, which jumped in active trading on the news of a possible takeover bid from rival Texas electric power generation company Vistra Energy Corp. – the post-reorganization successor company to the old TXU Corp. and its various component companies.

Dynegy was not only the biggest gainer, but it was the volume leader as well.

Intelsat SA’s bonds were seen slightly easier, coming off the big gains which those notes had notched on Thursday after the communications satellite company sweetened the terms of its pending exchange offer for a big chunk of its bonds, part of its planned merger with sector peer OneWeb. The success of the debt exchange offer – which has now been extended through the end of the month – is considered crucial to the progress of the merger, and to the planned investment of $1.7 billion into Intelsat by OneWeb’s corporate parent, the Japanese tech company Softbank Group Inc.

Energy issues such as California Resources Corp.’s bonds were seen solidly higher, in line with a continued rise in crude oil prices.

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