Frontier notes up amid bankruptcy talk; California Resources gains in energy space

By James McCandless

San Antonio, March 10 – In contrast to Monday’s dive, the distressed debt space saw some recovery in Tuesday trading.

Frontier Communications Corp.’s notes were moving up despite reports indicating that the company is preparing to file for bankruptcy.

The 10½% senior notes due 2022 jumped up 8 points to close at 43 bid. The 11% senior notes due 2025 shot up 11½ points to close at 43 bid.

News reports on Tuesday indicated that the Norwalk, Conn.-based wireline telecom name is preparing to file for Chapter 11 bankruptcy.

The company plans to forgo coupon payments on March 15, which would trigger a 30-day forbearance period.

Discussions are being held to secure potential debtor-in-possession financing and establish a restructuring plan that would slash debt and give control of the name to creditors.

Meanwhile, in oil and gas, California Resources Corp.’s paper made gains as the company adjusts its capital investments.

The 6% senior notes due 2024 garnered 1 point to close at 12½ bid. The 8% senior secured paper due 2022 improved by 1½ points to close at 10¼ bid.

Late Monday, the Los Angeles-based independent oil and gas producer announced that it would reduce its capital investments to a level that maintains the mechanical integrity of its operations.

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