January 17, 2019 / 12:53 AM / 6 months ago

S&P cuts rating on PG&E unit in third such cut this month

FILE PHOTO: PG&E crew work on power lines to repair damage caused by the Camp Fire in Paradise, California, U.S. November 21, 2018. REUTERS/Elijah Nouvelage

(Reuters) - S&P cut its rating on PG&E Corp’s (PCG.N) Pacific Gas & Electric Co unit on Wednesday, making it the third such cut this month, after the unit missed interest payments on its 2040 senior notes.

The credit rating agency downgraded the unit’s rating to ‘D’ from ‘CC’ after Pacific Gas and Electric failed to make the $21.6 million interest payment due on Tuesday, as the company planned to seek Chapter 11 bankruptcy protection.

The latest cut comes two days after both Fitch and S&P downgraded PG&E and its Pacific Power & Gas Co unit in the face of massive claims stemming from deadly wildfires.

PG&E, which provides electricity and natural gas to 16 million customers in northern and central California, faces widespread litigation, government investigations and liabilities that could potentially exceed $30 billion because of the fires.

The most recent fire last November killed at least 86 people in the deadliest and most destructive blaze in California history.

San Francisco-based PG&E is working on lining up roughly $5.5 billion in so-called debtor-in-possession financing to help operations during bankruptcy proceedings.

Reporting by Aakash Jagadeesh Babu in Bengaluru; Editing by Tom Brown and Peter Cooney

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