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.