PG&E enters commitment letters for $10 billion of bank facilities

By Sarah Lizee

Olympia, Wash., May 27 – PG&E Corp. subsidiary Pacific Gas and Electric Co. entered into commitment letters with JPMorgan Chase Bank, NA on Tuesday to provide for a $3.5 billion revolving credit facility and an up to $6 billion term loan credit facility, according to an 8-K filing with the Securities and Exchange Commission.

The revolver will have a term of three years, subject to one-year extension options. The term loan facility will be comprised of two tranches, with terms of 364 days and 18 months.

Interest on the revolver will be Libor plus 137.5 basis points to 250 bps based on ratings, and interest on the term loan will be Libor plus 200 bps for the 364-day tranche and Libor plus 225 bps for the 18-month tranche.

The proceeds from the revolver and term loan will be used to fund transactions contemplated under PG&E’s joint Chapter 11 plan of reorganization. Proceeds from the revolver may also be used to finance working capital needs, capital expenditures and other general corporate purposes.

Also on Tuesday, PG&E Corp. entered into a commitment letter with JPMorgan to provide for a $500 million revolver. This revolver has a three-year term, subject to two one-year extension options, and bears interest at Libor plus 300 bps to 400 bps based on ratings.

The proceeds from the $500 million revolver will be used to finance working capital needs, capital expenditures and other general corporate purposes.

Each credit facility will become effective upon the satisfaction or waiver of some conditions, including the companies’ emergence from bankruptcy.

JPMorgan, Bank of America, NA, Barclays, Citigroup Global Markets Inc. and Goldman Sachs Bank USA are the joint lead arrangers for each facility

Lenders also include Credit Suisse AG, New York Branch, MUFG Union Bank, NA, Bank of Montreal, Chicago Branch, BNP Paribas, Mizuho Bank, Ltd., Wells Fargo Bank, NA and Bank of New York Mellon. Bank of China, Los Angeles Branch is also a lender party for the term loan.

PG&E is an electric and natural gas utility based in San Francisco. The company filed bankruptcy on Jan. 29, 2019 under Chapter 11 case number 19-30088.

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