Chesapeake notes in focus as interest payment skipped; PG&E up after new notes price

By James McCandless

San Antonio, June 19 – At the end of the week, the energy and utilities sectors garnered the most attention in the distressed debt space.

Chesapeake Energy Corp.’s notes varied as the company announced that it would skip an interest payment.

The 11½% notes due 2025 shaved off ¼ point to close at 17½ bid. The 8% senior notes due 2025 held level at 5 bid.

After the Thursday close, the Oklahoma City-based independent oil and gas producer announced that it would skip interest payments on its 5.375% senior notes due 2021 and 8% senior notes due 2027, cumulating to $13.5 million.

The choice to forego the June 15 payment triggered a 30-day forbearance period.

At the same time, the company came to an agreement with some holders to waive certain events of default in exchange for reducing its borrowing base to $2.3 billion from $3 billion.

Throughout the week, news reports indicated that the company is preparing to file for Chapter 11 bankruptcy.

In the utilities space, PG&E Corp.’s notes pushed up following the pricing of $2 billion in senior secured notes.

The 6.05% notes due 2034 gained ½ point to close at 121 bid.

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