PG&E Corp secures $500 million term loan with one-year maturity

Pacific Gas and Electric Company, a subsidiary of PG&E Corp (NYSE:PCG), entered into a $500 million term loan credit agreement with a group of lenders and Wells Fargo Bank, National Association, acting as administrative agent, on Wednesday. The loan has a maturity date of September 23, 2026, and the company borrowed the full amount on the day the agreement was signed.

According to a statement filed with the Securities and Exchange Commission, borrowings under the agreement will bear interest at the company’s choice of either Term SOFR plus a 1.25% margin or an alternative base rate plus a 0.25% margin.

The company’s obligations under the credit agreement are secured by a first mortgage bond, issued under a supplemental mortgage indenture, with a first lien on substantially all of the company’s real property and certain tangible personal property related to its facilities, subject to specified exceptions. This bond will rank equally with the company’s other first mortgage bonds.

The agreement includes customary covenants for this type of term loan, limiting liens, sale and leaseback transactions, fundamental changes, entry into swap agreements, and modifications to the mortgage indenture, with certain exceptions. The company is also required to maintain a total consolidated debt to consolidated capitalization ratio of no more than 65% at the end of each fiscal quarter.

In the event of a default, including cross-defaults on specified other debt exceeding $200 million, the administrative agent may declare the outstanding amounts and accrued interest immediately due. For defaults relating to insolvency, bankruptcy, or receivership, outstanding amounts become immediately payable.

The information in this article is based on a press release statement filed with the SEC. For comprehensive analysis of PG&E’s financial health, including 5 key ProTips and detailed valuation metrics, visit InvestingPro, where you’ll find expert insights and the complete Pro Research Report covering what really matters about this utility giant.

In other recent news, Pacific Gas and Electric Company (PG&E) has entered into a $500 million Term Loan Credit Agreement with Wells Fargo and several other lenders. This one-year loan, maturing in September 2026, was fully borrowed on the day of the agreement. The loan offers interest options, including Term SOFR plus a 1.25% margin or an alternative base rate plus a 0.25% margin. Meanwhile, UBS has lowered its price target for PG&E to $17, expressing concerns over delays in establishing a permanent wildfire fund solution. The investment firm retained its Neutral rating on the stock. In contrast, Morgan Stanley upgraded PG&E from Underweight to Equalweight, raising its price target to $20, citing an improved risk profile and a replenished fund. Additionally, California lawmakers have reached an agreement to increase the state’s wildfire utility fund by approximately $18 billion, aiming to stabilize the fund affected by recent wildfires. This development involves contributions from both ratepayers and utility shareholders.

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