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2 Year Auction Unexpectedly Strong Just As Powell Pours Cold Water On Treasuries
In the chaos over Powell's unexpectedly less dovish comments which hit the tape at exactly 1pm, when sent stocks lower, and the dollar and bond yields sharply higher, the primary market had no time to react as it had already submitted its indications for today's $40 billion 2 Year auction when Powell suddenly pulled the rug from under the bond market, sending 2Y yields higher and yet since there was solid demand for the auction before Powell's commentary, the sale of 2Y bonds was a smashing success, stopping at a high yield of 1.695%, 1bp inside the 1.705% When Issued, the 6th consecutive 2Y auction that did not tail. This was the lowest 2Y yield since October 2017, and 43bps below May's 2.2125%.
The bid to cover came in at 2.576, modestly lower than May's 2.745, if just above the 2.54 six auction average.
Finally, the internals were unremarkable with foreign buyers, i.e. Indirects taking 48.5% up from 46.6% last month, and on top of the 47.9% average. And with Directs taking down 24.2%, well above the 17.7% average, Dealers were tstuck with 27.3%, modestly above May's 26.2 but only the second lowest print of 2019.
Overall, a very strong auction which could have had a far different outcome if Powell's prepared remarks had hit just an hour earlier.
https://www.zerohedge.com/news/2019-06-25/2-year-auction-unexpectedly-strong-just-powell-pours-cold-water-treasuries?
this is moar evidence that money is coming into the US markets-equity's and debt as the rest of the word's debt is largely at negative yields and you lose money by holding it.
somebody did
PG&E bondholders propose bankruptcy exit plan worth up to $30 bln
SAN FRANCISCO (Reuters) - A committee of bondholders of PG&E Corp’s utility unit on Tuesday proposed a bankruptcy reorganization plan that would inject up to $30 billion to help the California power provider emerge from Chapter 11 and pay off its liability from wildfires.
In a filing with the U.S. bankruptcy court in San Francisco, the committee, made up of senior unsecured noteholders of Pacific Gas & Electric Co, also sought to terminate the utility’s exclusive period for filing a Chapter 11 reorganization plan so the committee may file its own plan. PG&E has until Sept. 29 to file a plan.
PG&E has been too slow to file its own plan and “the need to exit bankruptcy expeditiously is paramount,” the committee said in its filing, adding its plan would provide up to $16 billion to compensate all of PG&E’s pre-bankruptcy wildfire claims.
The committee’s plan would be funded by $18 billion in cash from bondholders in exchange for new common shares in a reorganized company, as well as $2.2 billion in insurance proceeds owed PG&E for wildfire losses.
Bondholders would also provide $4 billion in cash in exchange for new unsecured notes and $5.5 billion would be raised by selling new secured notes to third-party investors.
San Francisco-based PG&E sought Chapter 11 bankruptcy protection in January in the aftermath of devastating wildfires in Northern California in 2017 and 2018 that left the company anticipating $30 billion in liabilities blamed on its equipment.
The worst of the blazes, November’s Camp Fire, leveled the town of Paradise and killed more than 80 people. It was the deadliest and most destructive wildfire of modern times in California.
A spokesman said the committee had no additional comment on the plan beyond its filing.
A spokesman for PG&E in an email to Reuters said the power provider is “committed to working together with our stakeholders through the Chapter 11 process to fairly and expeditiously resolve our liabilities resulting from the 2017 and 2018 Northern California wildfires, develop a more sustainable business model and continue delivering safe and reliable service.”
The committee said in its filing that its reorganization plan will provide a “substantial” capital investment to fund improvements in PG&E’s electric infrastructure to ensure reliable power service and meet California’s renewable energy goals.
The committee also said its plan will provide for a quick exit from bankruptcy for PG&E that maintains an investment-grade rating for the power provider.
The committee’s filing did not identify unsecured noteholders that would participate in the plan, but the largest stakeholders in the group include Pacific Investment Management Co LLC, Elliott Management Corp and Davidson Kempner Capital Management.
According to the committee’s filing, terms of the plan will not affect PG&E’s ratepayers and will provide for a $4 billion contribution to a fund for insuring against utility-related wildfire liabilities that California officials are considering establishing.
Governor Gavin Newsom last week proposed helping utilities create a fund of up to $21 billion to compensate future victims of wildfires sparked by the companies’ equipment or employees.
Approval from state lawmakers would be needed to create the fund.
https://www.reuters.com/article/us-pg-e-us-bankruptcy/pge-bondholders-propose-bankruptcy-exit-plan-worth-up-to-30-billion-idUSKCN1TQ21D?
these are the bond holders trying to dictate the settlement and bankruptcy-sorry the fire alone caused this much damage-the just want to be in the front of the payout line as well as push out new debt to 'start over'.
"sources"