SAN FRANCISCO - Pacific Gas and Electric Company
today announced that it has secured commitments for
$2.9 billion in credit facilities to support its working
capital needs and to refinance certain obligations related
to pollution control bonds. The funds also may be used
to pay a portion of the utility's creditor claims on
the effective date of the plan of reorganization, which
is the earliest date that draws on these facilities
may be made.
On March 5, 2004, the company entered into the following
An $850 million three year revolving credit facility.
The loan will be used primarily to cover operating expenses
and seasonal fluctuations in working capital, and may
be used to pay creditors on the effective date of the
plan of reorganization.
- Agreements providing for the sale of a portion
of the company's electricity and natural gas customer
accounts receivable to commercial paper conduits or
banks for up to $650 million.
- Four reimbursement agreements under which the lender
has agreed to issue approximately $620 million in
new letters of credit to support approximately $614
million in pollution control bonds that will be reinstated
on the effective date of the plan of reorganization.
- Two term loan facilities related to the remaining
pollution control bonds: One of these facilities will
provide $345 million to fund the purchase or redemption
of certain pollution control bonds on the effective
date. The other facility will enable the company to
satisfy its obligation to reimburse lenders for approximately
$454 million drawn upon during the Chapter 11 proceeding
to redeem certain pollution control bonds.
The California Public Utilities Commission authorized
the exit financing structure, including these transactions,
on January 8, 2004. The Commission's financing team
concurred with the exit financing structure on March
4, 2004; this concurrence was necessary under the terms
of the settlement agreement.
Implementation of the plan of reorganization is subject
to various conditions, among which are the receipt of
investment grade credit ratings and the consummation
of the public offering of the long-term debt that represents
the balance of the financing needed to enable Pacific
Gas and Electric Company to emerge from Chapter 11.