INTERNATIONAL – S&P Global Ratings on Monday stripped PG&E Corp of its investment-grade credit rating, citing indications of a significant deterioration in the political and regulatory environment for the California power utility.
S&P also kept PG&E’s ratings on credit watch negative and said it could further lower PG&E’s rating over the next few months if explicit steps are not taken by authorities to improve the 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.”
PG&E said in November it could face “significant liability” in excess of its insurance coverage if its equipment was found to have caused last year’s fires in northern California.
S&P cut the rating on both PG&E and its Pacific Power & Gas Co operating utility to “B” from its previous rating of “BBB-,” the lowest tier of so-called investment-grade ratings.