PG&E (NYSE:PCG) Corp and its subsidiary, PG&E Recovery Funding LLC, announced the issuance of $1.42 billion in Senior Secured Recovery Bonds, Series 2024-A, on Thursday. The bonds, secured by the company, were issued pursuant to an Indenture and Series Supplement, both dated August 1, 2024. This financial move comes as part of the company's strategy to manage its financial structure and obligations.
The Recovery Bonds were offered to investors as outlined in a Prospectus dated July 24, 2024. In conjunction with the bond issuance, PG&E Recovery Funding LLC and Pacific Gas and Electric Company (Utility) entered into several agreements to facilitate the servicing, purchase, sale, and administration of the recovery property associated with the bonds. These agreements include the Recovery Property Servicing Agreement, the Recovery Property Purchase and Sale Agreement, the Administration Agreement, and the Joinder Agreement, each also dated August 1, 2024.
The Indenture agreement was made with The Bank of New York Mellon (NYSE:BK) Trust Company, N.A., which acts as the trustee for the bondholders. The various agreements outline the terms and responsibilities for managing the recovery property, which serves as collateral for the bonds, and the administration of the funds generated from the recovery property.
The funds generated from the Recovery Bonds are expected to be used by PG&E Corp and its subsidiaries to recover costs associated with their operations and investments. This financial action is part of the company's broader strategy to strengthen its financial position and continue its operations effectively.
In other recent news, PG&E Corp and its subsidiary, PG&E Recovery Funding LLC, have issued $1.42 billion in Senior Secured Recovery Bonds, Series 2024-A. This move is part of the company's strategy to manage its financial structure and obligations. Furthermore, the company reported a profitable second quarter, surpassing analysts' estimates due to increased service rates, and experienced a 15.7% increase in its electric segment's revenue.
However, the company has lowered its 2024 GAAP earnings forecast due to unrecoverable interest expenses and wildfire damage liabilities. Analyst firms JPMorgan (NYSE:JPM), UBS, and Mizuho Securities have shown positive outlooks on PG&E, with JPMorgan upgrading its stock from Neutral to Overweight, and both UBS and Mizuho maintaining a Buy rating. These recent developments highlight the ongoing financial restructuring and risk management strategies of PG&E Corp.
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