PG&E enters debt commitments, but plans to find permanent financing

By Caroline Salls

Pittsburgh, Oct. 15 – PG&E Corp. has entered into debt commitment letters under which the commitment parties agreed to provide $34.46 billion in bridge financing, according to an 8-K filed Tuesday with the Securities and Exchange Commission.

However, in lieu of entering into the facilities, PG&E said it intends to obtain permanent financing on or before emergence from bankruptcy in the form of bank facilities, debt securities or a combination of those.

As previously reported, the company has already received commitments which provide for the funding of up to $14 billion of equity proceeds to PG&E on the effective date of its proposed plan of reorganization.

In connection with the proposed plan, the PG&E debtors entered into the debt commitment letters for the bridge financing on Friday with JPMorgan Chase Bank, NA, Bank of America, NA, BofA Securities, Inc., Barclays Bank plc, Citigroup Global Markets Inc., Goldman Sachs Bank USA and Goldman Sachs Lending Partners LLC.

The bridge financing will include a $27.35 billion senior secured bridge loan facility with Pacific Gas and Electric or any domestic entity formed to hold all of its upon emergence from bankruptcy as borrower and a $7 billion senior unsecured bridge loan facility with the parent company or any domestic entity formed to hold all of its assets upon emergence as borrower.

The bridge financing commitments are scheduled to expire on Aug. 29, 2020. The scheduled maturity of each of the facilities would be 364 days following the date they are funded.

The commitment parties’ funding obligations are subject to the delivery of specified financial information, PG&E’s receipt of at least $14 billion of proceeds from the issuance of equity, of which up to $2 billion may take the form of preferred equity, equity-linked securities or securitizations to the extent not negatively impacting cash distributions or distributions that will be available to service debt, the execution of definitive documentation and Pacific Gas and Electric receiving investment-grade senior secured debt ratings.

In addition, the debt commitment letters are subject to approval by the U.S. Bankruptcy Court for the Northern District of California, and the utility’s ability to borrow under the operating company facility is subject to approval by the California Public Utilities Commission.

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

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.