PG&E disclosed this morning that the corporation and its Pacific Gas and Electric Company entered into a commitment letter for debtor-in-possession financing with JPMorgan Chase Bank, Bank of America, Barclays Bank and Citigroup Global Markets pursuant to which the commitment parties committed to provide $5.5B in senior secured superpriority debtor-in-possession credit facilities. Borrowings under the DIP Facilities would be senior secured obligations of the utility, secured by substantially all of its assets and entitled to superpriority administrative expense claim status in the utility’s bankruptcy case, PG&E said in as regulatory filing. The utility’s obligations under the DIP Facilities would be guaranteed by the corporation. The scheduled maturity of the DIP Facilities would be December 31, 2020, subject to the utility’s option to extend the maturity to December 31, 2021 if certain terms and conditions are satisfied. PG&E expects that the DIP Facilities will provide it with sufficient liquidity to fund its ongoing operations, including its ability to provide safe service to customers during the Chapter 11 cases. PG&E currently expects the Chapter 11 cases to take approximately two years. Shares of PG&E are up 10%, or 73c, to $7.97 in midday trading.
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