PRESS RELEASES 2004
FOR IMMEDIATE RELEASE
March 09, 2004
ISSUED BY:   Corporate Communications 1-800-743-6397

PACIFIC GAS AND ELECTRIC COMPANY MOVES ONE STEP CLOSER TO EMERGING FROM CHAPTER 11

Secures $2.9 Billion in Working Capital and Financing and Receives CPUC Approval of Exit Financing Structure

SAN FRANCISCO - Pacific Gas and Electric Company today announced that it has secured commitments for $2.9 billion in credit facilities to support its working capital needs and to refinance certain obligations related to pollution control bonds. The funds also may be used to pay a portion of the utility's creditor claims on the effective date of the plan of reorganization, which is the earliest date that draws on these facilities may be made.
On March 5, 2004, the company entered into the following agreements:

An $850 million three year revolving credit facility. The loan will be used primarily to cover operating expenses and seasonal fluctuations in working capital, and may be used to pay creditors on the effective date of the plan of reorganization.

  • Agreements providing for the sale of a portion of the company's electricity and natural gas customer accounts receivable to commercial paper conduits or banks for up to $650 million.

  • Four reimbursement agreements under which the lender has agreed to issue approximately $620 million in new letters of credit to support approximately $614 million in pollution control bonds that will be reinstated on the effective date of the plan of reorganization.

  • Two term loan facilities related to the remaining pollution control bonds: One of these facilities will provide $345 million to fund the purchase or redemption of certain pollution control bonds on the effective date. The other facility will enable the company to satisfy its obligation to reimburse lenders for approximately $454 million drawn upon during the Chapter 11 proceeding to redeem certain pollution control bonds.

The California Public Utilities Commission authorized the exit financing structure, including these transactions, on January 8, 2004. The Commission's financing team concurred with the exit financing structure on March 4, 2004; this concurrence was necessary under the terms of the settlement agreement.

Implementation of the plan of reorganization is subject to various conditions, among which are the receipt of investment grade credit ratings and the consummation of the public offering of the long-term debt that represents the balance of the financing needed to enable Pacific Gas and Electric Company to emerge from Chapter 11.


 

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