PG&E To File Bankruptcy Within Hours; Joins Lehman And WorldCom In Tragic Ranking

Zero Hedge | 1/28/2019 | Staff
amyc9948 (Posted by) Level 3
Click For Photo: https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/max_650x650/public/2019-01/camp%20fire_2.jpg?itok=z_icsK9h

Confirming earlier reports that distressed California utility PG&E had rejected a proposal by some of the world's most prominent investors that would keep it out of bankruptcy, moments ago Bloomberg reported that the board of the embattled utility which is facing $30 billion in wildfire liabilities, voted late Monday to file for bankruptcy protection as soon as midnight.

In pursuing a Chapter 11 bankruptcy filing, PG&E is declining a proposal by an investing group led by Paul Singer’s Elliott Management that would’ve been backed by $4 billion in bonds and given the company enough cash to stay avoid bankruptcy while working through its liabilities. A second group of investors including Ken Griffin’s Citadel and Leon Black’s Apollo who had pitched a rival plan, were also rebuffed.

Minute - Rescue - Bids - PG - E

By rejecting the last minute rescue bids, PG&E - which was rated investment grade as recently as a few weeks ago by both S&P and Moody's- is set to file one of the biggest U.S. utility bankruptcies of all time, with over $30 billion in debt about to be in default. The company which serves 16 million customers, said a Chapter 11 filing is the only way it can handle the crippling costs of 2017 and 2018 wildfires that its equipment has been blamed for igniting. Since November, when California was hit by the deadliest fire in its history, the company has seen its shares plunge by 75 percent and its credit rating cut to junk.

By going from investment grade to bankruptcy within one year, PG&E will be what BofA recently dubbed not a "fallen angel" but a "failing angel", representing a singular event: when it files for bankruptcy some time in the next 12 hours, PG&E will become the third largest IG default since 1999, behind Lehman and Worldcom, with $17.5bn of index eligible debt.

The...
(Excerpt) Read more at: Zero Hedge
Wake Up To Breaking News!
Sign In or Register to comment.

Welcome to Long Room!

Where The World Finds Its News!