PG&E High-interest Bonds Dip After Fire Victim Settlement

Date : 12/09/2019 @ 6:12PM
Source : Dow Jones News
Stock : Pacific Gas and Electric Company (PCG)
Quote : 13.08  0.45 (3.56%) @ 1:00AM
After Hours
Last Trade
Last $ 13.06 ▼ -0.02 (-0.15%)

PG&E High-interest Bonds Dip After Fire Victim Settlement

Pacific Gas and Electric (NYSE:PCG)
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2 Months : From Nov 2019 to Jan 2020

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By Matt Wirz 

Prices of PG&E Corp.'s high-interest bonds dropped Monday morning, the first trading day since the bankrupt California utility announced a settlement with wildfire victims that has weakened efforts by bondholders to take over the company.

The decline in the bonds that were issued at higher interest rates reflects uncertainty about a legal argument pursued by a bondholder committee to boost the value of its claims. PG&E's 6.05% bond due 2034 dipped as low as 103.75 cents on the dollar Monday, from about 104.50 Friday, before the announcement of the settlement, according to data from MarketAxess.

The bondholders, who include Elliott Management Corp. and Pacific Investment Management Co., are scheduled to argue in San Francisco bankruptcy-court hearings this month and next that PG&E should pay them accrued interest at the original contract interest rate of their notes rather than the federal judgment rate of about 3%.

Prices of PG&E bonds that carry a lower contracted rate of interest are converging with those of the high-coupon bonds as doubts about the legal strategy mount. PG&E's 3.5% bond due 2020 climbed Monday to 100.25 from 99.90 on Friday, according to MarketAxess

In emerging markets, Ukraine government bonds rose on increased optimism about an international financing package for the country. IMF Managing Director Kristalina Georgieva issued a statement Saturday pledging support for Ukraine's policy agenda "including with a new IMF-supported program," subject to approval by the Fund's management.

Ukraine's 7.375% sovereign bond due 2032 climbed to about 104.4 cents on the dollar Monday from roughly 102 last week, according to MarketAxess.

U.S. government bond yields fell this morning amid mounting investor concern about U.S. tariffs on Chinese goods scheduled to take effect this month. The yield of the 10-year Treasury fell to around 1.824% Monday, from a close of 1.842% Friday, according to Tradeweb.

The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, fell less than 0.1% Monday morning to 90.61.

Write to Matt Wirz at matthieu.wirz@wsj.com

 

(END) Dow Jones Newswires

December 09, 2019 12:57 ET (17:57 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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