PG&E; Unit Sells $6.7 Billion in Debt
PG&E; Corp.’s Pacific Gas & Electric unit sold $6.7 billion in debt, the biggest U.S. corporate debt sale since June, to help pay creditor claims of $12 billion as it emerges from bankruptcy protection.
California’s largest utility sold the debt in five parts consisting of fixed-rate borrowings maturing in five, seven, 10 and 30 years, and a two-year floating-rate note.
The new bonds are secured by a first mortgage on utility properties to help pay the bankruptcy-related claims.
Pacific Gas agreed to sell $8 billion of debt under its court-approved reorganization plan. The company filed for bankruptcy protection in April 2001 after amassing $9 billion of debt buying electricity at prices that soared during California’s energy crisis.
Lehman Bros. Holdings Inc. and UBS managed the sale for the San Francisco-based utility.
Moody’s Investors Service rated the bonds Baa2, and Standard & Poor’s ranked them BBB, the second-lowest investment-grade levels.
Shares of PG&E; fell 31 cents to $29.01 on the New York Stock Exchange.
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