S&P downgrades PG&E

Standard & Poor's said it lowered the corporate credit ratings to BBB from BBB+ on PG&E Corp. and its subsidiary Pacific Gas and Electric Co.

PG&E Corp.'s senior unsecured debt rating was lowered to BBB- from BBB.

The Pacific Gas' senior unsecured debt rating was lowered to BBB from BBB+ and its preferred stock rating to BB+ from BBB-. Its short-term rating was affirmed at A-2.

The outlook is stable.

The downgrades reflect its significant consolidated financial profile and strong business profile that continues to be weighed down by the San Bruno, Calif. gas transmission pipeline explosion of September 2010, S&P said.

The downgrades also reflect the rebuilding of its natural gas operations, customer reputation and regulatory relationships following the 2010 explosion that resulted from the utility's inadequate controls, the agency said.

The stable outlook reflects an expectation that despite these enormous business challenges, management changes have helped develop a credible plan to build a stronger safety culture at the utility, S&P said.

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