PG&E wins court approval of $22.83 billion in financing commitments

By Caroline Salls

Pittsburgh, March 17 – PG&E Corp. received court approval to enter debt financing commitment letters, according to an order filed Monday with the U.S. Bankruptcy Court for the Northern District of California.

Specifically, the court granted approval for PG&E to enter into commitments for the backstop of the issuance of up to $12 billion of post-bankruptcy common stock and debt financing commitment letters that provide up to $10.825 billion in funding.

As previously reported, the equity commitments will be used to pay wildfire claims against the company. The debt financing will be used to repay PG&E’s debtor-in-possession facility and other debt.

The premium to be paid to equity backstop commitment parties will be 119 shares of new common stock. If the market value of those shares is less than $764 million, the backstop parties would be eligible to receive up to 139 million shares.

The debt financing commitments include a $5 billion 364-day unsecured bridge term loan facility and a $5.285 billion 364-day senior secured bridge term loan facility.

Interest on the unsecured facility would accrue at a rate of Libor plus 175 basis points to Libor plus 300 bps, based on the company’s public debt rating.

PG&E is an electric and natural gas utility based in San Francisco. The company filed bankruptcy on Jan. 29, 2019 under Chapter 11 case number 19-30088.

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