PRESS RELEASES 2004
FOR IMMEDIATE RELEASE
March 11, 2004
ISSUED BY:   Corporate Communications 1-800-743-6397

PG&E ISSUES STATEMENT AFTER S&P INDICATES THE COMPANY AND ITS SENIOR SECURED DEBT WILL BE RATED AT INVESTMENT GRADE LEVELS

Another Significant Accomplishment as the Utility Prepares to Emerge from
Chapter 11

SAN FRANCISCO - Pacific Gas and Electric Company today issued the following statement after Standard & Poor's Rating Services (S&P) announced that it expects the company's corporate credit rating and its senior secured debt rating to be at investment grade levels upon the company's emergence from Chapter 11. Specifically, S&P anticipated the corporate credit rating will be BBB- and the senior secured debt rating will be BBB:

"Investment grade credit ratings are a requirement of the plan of reorganization, and key to the company's ability to successfully complete the financings necessary to emerge from Chapter 11. S&P's announcement brings us closer to reaching that milestone.

"Pacific Gas and Electric Company's plan of reorganization will allow it to exit Chapter 11 as an investment grade company, to pay in full or otherwise fully satisfy all valid creditor claims, and to do so without raising customers' rates. In fact, the company was recently able to lower customers' electric rates by approximately $800 million, with the average bundled rate decreasing by eight percent.

"Obtaining investment grade credit levels is the best and most efficient way for the company to purchase energy for its customers and invest billions of dollars in new infrastructure to keep California's economy moving."

Earlier this week, Pacific Gas and Electric Company announced it had 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. Part of the funds from those agreements also may be used to pay a portion of the company's creditor claims on the effective date of the plan of reorganization, which is the earliest date that draws on the facilities may be made.

NOTE: In its press release, S&P noted that definitive debt ratings will not be assigned until the company emerges from Chapter 11, and other conditions are met.


 

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