DUFF & PHELPS: PACIFIC GAS & ELECTRIC CO. CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY $700 MLN FIRST, REFUNDING MORTGAGE BONDS RATED 'A'
CHICAGO, Sept. 14 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of "A" (Single-A) to Pacific Gas and Electric Company's (NYSE: PCG) $700 million offering of first and refunding mortgage bonds. The two-part offering consists of $300 million 5 7/8 percent bonds due 2005 and $400 million 6 3/4 percent bonds due 2023. Pacific Gas and Electric's management has taken several steps to better prepare the company for a more price sensitive, competitive environment. Commitments include eliminating 3,000 positions by 1995, freezing retail electric rates through the end of 1994, and foregoing recovery of certain revenue adjustment entitlements. The company also is pursuing an economic stimulus rate to attract and maintain businesses in the service territory. Pacific Gas and Electric's credit protection measures are expected to remain satisfactory. However, the regulatory environment in California shows increasing signs of uncertainty. A majority of the Canadian natural gas producers in the Alberta and Southern Gas Co. Ltd pool have indicated their support for decontracting gas supplies for the California market. While support for the restructuring is positive, Pacific Gas and Electric will have to pay about $200 million to buy out long-term contracts. It is expected that shareholders will be liable for about $25 million, and $100 million will be passed on to users of the Canada-to-California pipeline. Importantly, the ratings assume satisfactory treatment of the pending gas cost regulatory action, reasonable settlements of Canadian gas take-or-pay issues, and recovery of such costs. Pacific Gas and Electric is one of the nation's largest investor- owned electric and gas utilities, serving 11.8 million people in northern and central California. -0- 9/14/93 /CONTACT: William A. Abrams, CFA, of Duff & Phelps Credit Rating Co., 312-368-3112/ (PCG)
CO: Pacific Gas and Electric Co. ST: California IN: UTI SU: RTG
LG -- NY074 -- 1888 09/14/93 16:00 EDT
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|Date:||Sep 14, 1993|
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