Moody's affirms PG&E

Moody's Investors Service said it affirmed the ratings on Pacific Gas and Electric Co. (A3 senior) and its parent PG&E Corp. (Baa1 senior).

The outlooks are stable.

PG&E's ratings reflect the sustainability of strong credit metrics due in large part to the continuation of a credit supportive regulatory environment in California as well as a corporate strategy centered around regulated rate base growth through infrastructure related investments, Moody's said.

The ratings consider the expectations for the company to remain free cash flow negative due to a sizeable capital expenditure program and for the utility to generate similar metrics in the future, the agency said.

The rating affirmation for Pacific Gas reflects the focused business strategy around its regulated utility, the fairly conservative dividend payout ratio and the degree of structural subordination that exists for debtholders at the parent, the agency added.

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