PG&E Corp was stripped of its investment grade credit rating on Monday by the global ratings agency S&P Global Ratings. The arguments put forward by the ratings agency for lowering the stocks of PG&E included the California power utility was set to face acute challenges resulting from a significant deterioration in its political and regulatory environment.,
S&P also said that the ratings for PG&E was being kept on creditwatch negative while also adding that the stock ratings of the company by the agency could be further lowered within the next few months the if company did not engage in any constructive measures which could be able to enhance the company’s regulatory compact.
"We could also lower the ratings by one or more notches if management does not clearly articulate specific steps it will take to preserve credit quality over the long term."
In November, PG&E said that it was possible that the company could face "significant liability" in addition to its insurance coverage if it was found that was found that last year's fires in northern California were cause by its equipment.
The stock rating of PG&E as well as its Pacific Power & Gas Co operating utility was cut by the global ratings agency from its previous rating of "BBB-," to "B" which is the on the lowest rank of what markets and the ratings agency calls investment-grade ratings.
S&P further added that the PG&E's recent announcement that the company's management, finances, governance and structural options were being reviewed by its board was also taken into account while making the downgrade.
"We assess this announcement as the culmination of a decisive souring of the political and regulatory environment," S&P said in a statement.
There were reports in the media earlier this month which claimed that options and modes of filing for bankruptcy protection was being sought by PG&E Corp. this move is reportedly being considered by the company for some or all of its businesses because the company is very concerned about the potential huge charges that it would face in the fourth quarter in relation to the possible liabilities that it would be put into from the California wildfires.
In mid-November, the three main ratings agencies had downgraded the credit ratings for PG&E and its Pacific Gas & Electric unit,
(Source:www.channelnewsasia.com)
S&P also said that the ratings for PG&E was being kept on creditwatch negative while also adding that the stock ratings of the company by the agency could be further lowered within the next few months the if company did not engage in any constructive measures which could be able to enhance the company’s regulatory compact.
"We could also lower the ratings by one or more notches if management does not clearly articulate specific steps it will take to preserve credit quality over the long term."
In November, PG&E said that it was possible that the company could face "significant liability" in addition to its insurance coverage if it was found that was found that last year's fires in northern California were cause by its equipment.
The stock rating of PG&E as well as its Pacific Power & Gas Co operating utility was cut by the global ratings agency from its previous rating of "BBB-," to "B" which is the on the lowest rank of what markets and the ratings agency calls investment-grade ratings.
S&P further added that the PG&E's recent announcement that the company's management, finances, governance and structural options were being reviewed by its board was also taken into account while making the downgrade.
"We assess this announcement as the culmination of a decisive souring of the political and regulatory environment," S&P said in a statement.
There were reports in the media earlier this month which claimed that options and modes of filing for bankruptcy protection was being sought by PG&E Corp. this move is reportedly being considered by the company for some or all of its businesses because the company is very concerned about the potential huge charges that it would face in the fourth quarter in relation to the possible liabilities that it would be put into from the California wildfires.
In mid-November, the three main ratings agencies had downgraded the credit ratings for PG&E and its Pacific Gas & Electric unit,
(Source:www.channelnewsasia.com)
