PG & E (NYSE:PCG)
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1 Month : From Dec 2018 to Jan 2019
By Maria Armental
PG&E Corp.'s (PCG) credit ratings were downgraded below investment grade by Moody's Investors Service, citing the company's precarious financial position.
Moody's rating cut--to B2 from Baa3--brings it in line with S&P Global Ratings, which earlier this week cut its rating to a B from triple B minus.
Fitch Ratings currently rates PG&E's credit at triple B minus, one notch above junk grade, with a negative watch, which indicates a possible downgrade.
"The company is increasingly reliant on extraordinary intervention by legislators and regulators, which may not occur soon enough or be of sufficient magnitude to address these adverse developments," Moody's analyst Jeff Cassella said in a statement.
Moody's, which estimated PG&E may be required to post as much as $800 million more in collateral due to its rating falling below investment grade, said it would keep PG&E under review and warned that another multi-notch downgrade could follow.
Company spokesman Andy Castagnola didn't comment on the credit downgrades' financial cost to the company and said it is the company's policy to not comment on market rumor or speculation about a possible bankruptcy filing.
"As announced on Friday, the PG&E Board of Directors is making changes to reinforce the company's commitment to safety and improvement," spokesman Andy Castagnola wrote.
PG&E said last week it planned to shake up its board to add "fresh perspective" and bolster directors' expertise in fire safety and other key areas and was considering "structural options" but didn't specify what those options might be.
The California Public Utilities Commission had said it wanted feedback from the public on proposals to replace the company's board of directors and on whether PG&E's gas-and-electric division should be divided into separate companies.
On Tuesday, PG&E said that Patrick Hogan, the top executive overseeing the utility's electric division plans to retire this later this month.
PG&E, which owns California's largest utility company Pacific Gas & Electric Co., faces billions of dollars in liabilities from California's deadly wildfires in 2017 and 2018.
Investigators have linked PG&E's equipment to several of the 2017 wildfires, as heavy winds downed power lines igniting vegetation in Northern California's wine country. The company has also disclosed that some of its equipment malfunctioned in the Camp Fire area around the time the fire started in November. Camp Fire is the deadliest in California's history.
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(END) Dow Jones Newswires
January 10, 2019 18:49 ET (23:49 GMT)
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