PG&E High-interest Bonds Dip After Fire Victim Settlement
December 09 2019 - 1:12PM
Dow Jones News
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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