PG&E extends waiver of rating maintenance covenant

By Sara Rosenberg

New York, Oct. 3 - PG&E Corp. has extended the existing waiver of the requirement that PG&E National Energy Group maintain an investment-grade credit rating until Oct. 18 from Oct. 4, according to a filing with the Securities and Exchange Commission. Lehman Commercial Paper Inc. is the administrative agent on the credit facility.

During the term of the amended waiver, the company may not make any investment, capital expenditure or other payment to its subsidiaries of more than $5 million, compared to the $10 million cap that was placed on the company under the previous waiver.

Furthermore, the prior waiver required the company to pay a fee of 5% on any principal repaid on or before Oct. 21. The amended waiver extends this date to Nov. 5, the filing said.

PG&E plans to negotiate with lenders for the elimination of the credit rating maintenance covenants from the facility agreement but said there is no guarantee that such an amendment will be passed.

PG&E is a San Francisco, Calif. energy-based holding company.

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