DEBT

12 Months Ended

Dec. 31, 2019

Debtor-In-Possession Facilities

In connection with the Chapter 11 Cases, PG&E Corporation and the Utility entered into the DIP Credit Agreement, among the Utility, as borrower, PG&E Corporation, as guarantor, JPMorgan Chase Bank, N.A., as administrative agent, Citibank, N.A., as collateral agent, and the lenders and issuing banks party thereto (together with such other financial institutions from time to time party thereto, the “DIP Lenders”). The DIP Credit Agreement provides for $5.5 billion in senior secured superpriority debtor in possession credit facilities in the form of (i) a revolving credit facility in an aggregate amount of $3.5 billion (the “DIP Revolving Facility”), including a $1.5 billion letter of credit subfacility, (ii) a term loan facility in an aggregate principal amount of $1.5 billion (the “DIP Initial Term Loan Facility”) and (iii) a delayed draw term loan facility in an aggregate principal amount of $500 million (the “DIP Delayed Draw Term Loan Facility,” together with the DIP Revolving Facility and the DIP Initial Term Loan Facility, the “DIP Facilities”), subject to the terms and conditions set forth therein. The DIP Credit Agreement also provides for up to $4.0 billion of incremental facilities in the form of (i) one or more additional tranches of term loans or (ii) one or more increases in the aggregate amount of revolving commitments under the DIP Revolving Facility (together, the “Incremental Facilities”), subject to the terms and conditions set forth therein. The Incremental Facilities are uncommitted and would require approval from the Bankruptcy Court.

On the Petition Date, PG&E Corporation and the Utility filed a motion seeking, among other things, interim and final approval of the DIP Facilities, which motion was granted on an interim basis by the Bankruptcy Court following a hearing on January 31, 2019. As a result of the Bankruptcy Court’s interim approval of the DIP Facilities and the satisfaction of the other conditions thereof, the DIP Credit Agreement became effective on February 1, 2019 and a portion of the DIP Revolving Facility in the amount of $1.5 billion (including $750 million of the letter of credit subfacility) was made available to the Utility. On March 27, 2019, the Bankruptcy Court approved the DIP Facilities on a final basis, authorizing the Utility to borrow up to the remainder of the DIP Revolving Facility (including the remainder of the $1.5 billion letter of credit subfacility), the DIP Initial Term Loan Facility and the DIP Delayed Draw Term Loan Facility, in each case subject to the terms and conditions of the DIP Credit Agreement.

Borrowings under the DIP Facilities are senior secured obligations of the Utility, secured by substantially all of the Utility’s assets and entitled to superpriority administrative expense claim status in the Utility’s Chapter 11 Case. The Utility’s obligations under the DIP Facilities are guaranteed by PG&E Corporation, and such guarantee is a senior secured obligation of PG&E Corporation, secured by substantially all of PG&E Corporation’s assets and entitled to superpriority administrative expense claim status in PG&E Corporation’s Chapter 11 Case.

The proceeds of the borrowings under the DIP Facilities can be used for working capital and general corporate purposes and to pay fees, costs and expenses incurred in connection with the transactions contemplated by the DIP Credit Agreement and professional and other fees and costs of administration incurred in connection with the Chapter 11 Cases. On February 1, 2019, the Utility borrowed $350 million under the DIP Revolving Facility. On April 3, 2019, following the Bankruptcy Court’s final approval of the DIP Facilities, the Utility borrowed $1.5 billion under the DIP Initial Term Loan Facility and repaid the $350 million outstanding under the DIP Revolving Facility. On January 29, 2020, the Utility borrowed $500 million under the DIP Delayed Draw Term Loan Facility.

The DIP Facilities mature on December 31, 2020 (the “Maturity Date”), subject to the Utility’s option to extend the maturity to December 31, 2021 if certain terms and conditions are satisfied, including the payment of an extension fee equal to 0.25% of the then-outstanding loans and available commitments. As of December 31, 2019, the Utility does not intend to extend the Maturity Date. Both the DIP Initial Term Loan Facility and the Delayed Draw Term Loan bear interest at a spread of 225 basis points over LIBOR. Borrowings under the DIP Revolving Facilities will bear interest based, at the Utility’s election, on (1) LIBOR plus an applicable margin of 2.25% or (2) ABR plus an applicable margin of 1.25%. ABR will equal the highest of the following: (i) the administrative agent’s announced base rate, (ii) 0.50% above the (x) federal funds effective rate or (y) the overnight federal funds rate, whichever is higher, (iii) one-month LIBOR plus 1.00%, and (iv) zero.

The Utility is also required to pay unused fees of 0.375% per annum in respect of the average daily unutilized commitments under the DIP Revolving Facility. The Utility must also pay (x) a fee equal to the applicable margin with respect to LIBOR loans under the DIP Revolving Facility on the aggregate drawable amount of all outstanding letters of credit under the DIP Revolving Facility and (y) a fronting fee to the relevant issuing DIP Lender equal to 0.125% per annum of the aggregate drawable amount of outstanding letters of credit issued by such issuing DIP Lender.

The DIP Credit Agreement includes usual and customary covenants for debtor in possession loan agreements of this type, including covenants limiting PG&E Corporation’s and the Utility’s ability to, among other things, incur additional indebtedness, create liens on assets, make investments, loans or advances, engage in mergers, consolidations, sales of assets and acquisitions, pay dividends and distributions and make payments in respect of junior or pre-petition indebtedness, in each case subject to customary exceptions for debtor in possession loan agreements of this type.

The DIP Credit Agreement also includes customary and usual representations and warranties and affirmative covenants, including an obligation to deliver 13-week cash flow forecasts and reports showing variances from such forecasts, in each case on a rolling 4-week basis. PG&E Corporation’s and the Utility’s obligations under the DIP Credit Agreement may be accelerated following certain events of default, including payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to post-petition or unstayed indebtedness of PG&E Corporation and the Utility and their subsidiaries in excess of $200 million, certain events under ERISA, unstayed judgments in respect of post-petition obligations involving an aggregate liability in excess of $200 million, change of control, specified governmental actions having a material adverse effect or condemnation or damage to a material portion of the collateral. Certain bankruptcy-related events are also events of default, including, but not limited to, the dismissal by the Bankruptcy Court of any of the Chapter 11 Cases, the conversion of any of the Chapter 11 Cases to a case under Chapter 7 of the Bankruptcy Code, the appointment of a trustee pursuant to Chapter 11, any order authorizing the DIP Facilities being stayed, vacated, reversed or amended in a manner adverse to the DIP Lenders, and certain other events related to the impairment of the DIP Lenders’ rights or liens granted under the DIP Credit Agreement.

The commencement of the Chapter 11 Cases constituted an event of default or termination event with respect to, and caused an automatic and immediate acceleration of the debt outstanding under or in respect of, certain instruments and agreements relating to direct financial obligations of PG&E Corporation and the Utility (the “Accelerated Direct Financial Obligations”). However, any efforts to enforce such payment obligations are automatically stayed as of the Petition Date, and are subject to the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The material Accelerated Direct Financial Obligations include the Utility's outstanding senior notes, agreements in respect of certain series of pollution control bonds, and PG&E Corporation's term loan facility, as well as short-term borrowings under PG&E Corporation's and the Utility's revolving credit facilities and the Utility's term loan facility.

Debtor-in-Possession Financing

The following table summarizes the Utility’s outstanding borrowings and availability under the DIP Facilities at December 31, 2019:


(in millions)	Termination Date		Aggregate Limit		Term Loan Borrowings		Revolver Borrowings		Letters of Credit Outstanding		Aggregate Availability
DIP Facilities	December 2020	⁽¹⁾	$	5,500	$	1,500	$	—	$	663	$	3,337

⁽¹⁾ May be extended to December 2021, subject to satisfaction of certain terms and conditions, including payment of a 25 basis point extension fee.

On January 29, 2020, the Utility borrowed $500 million under the DIP Delayed Draw Term Loan Facility.

Debt

The following table summarizes PG&E Corporation’s and the Utility’s outstanding debt subject to compromise:


		December 31,
(in millions)	Contractual Interest Rates	2019		2018		Treatment under Proposed Plan ⁽¹⁾
Debt Subject to Compromise⁽²⁾
PG&E Corporation
Borrowings under Pre-Petition Credit Facility
PG&E Corporation Revolving Credit Facilities - Stated Maturity: 2022	variable rate⁽³⁾	$	300	$	300	Repaid in cash
Other borrowings
Term Loan - Stated Maturity: 2020	variable rate ⁽⁴⁾	350		350		Repaid in cash
Total PG&E Corporation Debt Subject to Compromise		650		650

Utility
Senior Notes - Stated Maturity:
2020	3.50%	800		800		Exchanged for New Utility Short-Term Notes
2021	3.25% to 4.25%	550		550		Exchanged for New Utility Short-Term Notes
2022	2.45%	400		400		Exchanged for New Utility Short-Term Notes
2023	3.25% to 4.25%	1,175		1,175		Reinstated
2024 through 2028	2.95% to 4.65%	3,850		3,850		Reinstated
2034 through 2040	5.40% to 6.35%	5,700		5,700		Exchanged for New Utility Long-Term Notes
2041 through 2042	3.75% to 4.50%	1,000		1,000		Reinstated
2043	4.60%	375		375		Reinstated
2043	5.13%	500		500		Exchanged for New Utility Long-Term Notes
2044 through 2047	3.95% to 4.75%	3,175		3,175		Reinstated
Unamortized discount, net of premium and debt issuance costs		—		(178)
Total Senior notes, net of premium and debt issuance costs		17,525		17,347
Pollution Control Bonds - Stated Maturity:
Series 2008 F and 2010 E, due 2026⁽⁵⁾	1.75%	100		100		Repaid in cash
Series 2009 A-B, due 2026⁽⁶⁾	variable rate ⁽⁷⁾	149		149		Exchanged for New Utility Funded Debt Exchange Notes
Series 1996 C, E, F, 1997 B due 2026⁽⁶⁾	variable rate ⁽⁸⁾	614		614		Exchanged for New Utility Funded Debt Exchange Notes
Total pollution control bonds		863		863
Borrowings under Pre-Petition Credit Facilities
Utility Revolving Credit Facilities - Stated Maturity: 2022 ⁽⁹⁾	variable rate⁽¹⁰⁾	2,888		2,965		Exchanged for New Utility Funded Debt Exchange Notes
Other borrowings:
Term Loan - Stated Maturity: 2019	variable rate⁽¹¹⁾	250		250		Exchanged for New Utility Funded Debt Exchange Notes
Total Borrowings under Pre-Petition Credit Facility Subject to Compromise		3,138		3,215
Total Utility Debt Subject to Compromise		21,526		21,425
Total PG&E Corporation Consolidated Debt Subject to Compromise		$	22,176	$	22,075

⁽¹⁾The treatments of debt under the Proposed Plan, described in this column relate only to the treatment of principal amounts and not pre-petition or post-petition interest. The New Utility Short-Term Notes, New Utility Long-Term Senior Notes and New Utility Funded Debt Exchange Notes are described in more detail under “Restructuring Support Agreement with the Ad Hoc Noteholder Committee” in Note 2.

⁽²⁾Debt subject to compromise must be reported at the amounts expected to be allowed by the Bankruptcy Court and the carrying values will be adjusted as claims are approved. Total Debt Subject to Compromise does not include accrued contractual interest of $1 million and $286 million for PG&E Corporation and the Utility, respectively, to the Petition Date. Total Debt Subject to Compromise also does not include post-petition interest of $15 million and $638 million for PG&E Corporation and the Utility, respectively, in accordance with the terms of the Noteholder RSA. As of December 31, 2019, PG&E Corporation and the Utility wrote off $178 million of unamortized debt issuance costs and debt discount to present the debt subject to compromise at the outstanding face value. The write-offs are included within long-term regulatory assets in the Consolidated Balance Sheets. See Notes 2 and 4 for further details.

⁽³⁾At December 31, 2019, the contractual LIBOR-based interest rate on loans was 3.24%.

⁽⁴⁾ At December 31, 2019, the contractual LIBOR-based interest rate on the term loan was 2.96%.

⁽⁵⁾Pollution Control Bonds series 2008F and 2010E were reissued in June 2017. Although the stated maturity date for both series is 2026, these bonds have a mandatory redemption date of May 31, 2022.

⁽⁶⁾Each series of these bonds is supported by a separate direct-pay letter of credit. Following the Utility’s Chapter 11 filing, investors in these bonds drew on the letter of credit facilities. The letter of credit facility supporting the Series 2009 A-B bonds matured on June 5, 2019. In December 2015, the maturity dates of the letter of credit facilities supporting the Series 1996 C, E, F, 1997 B bonds were extended to December 1, 2020. Although the stated maturity date of these bonds is 2026, each series will remain outstanding only if the Utility extends or replaces the letter of credit related to the series or otherwise obtains consent from the issuer to the continuation of the series without a credit facility.

⁽⁷⁾At December 31, 2019, the contractual interest rate on the letter of credit facilities supporting these bonds was 7.95%.

⁽⁸⁾At December 31, 2019, the contractual interest rate on the letter of credit facilities supporting these bonds ranged from 7.95% to 8.08%.

⁽⁹⁾ At December 31, 2019, excludes $22 million of undrawn letters of credit.

⁽¹⁰⁾At December 31, 2019, the contractual LIBOR-based interest rate on the loans was 3.04%.

⁽¹¹⁾ At December 31, 2019, the contractual LIBOR-based interest rate on the term loan was 2.36%.

Pollution Control Bonds Subject to Compromise

The California Pollution Control Financing Authority and the California Infrastructure and Economic Development Bank have issued various series of fixed rate and multi-modal tax-exempt pollution control bonds for the benefit of the Utility. Substantially all of the net proceeds of the pollution control bonds were used to finance or refinance pollution control and sewage and solid waste disposal facilities at the Geysers geothermal power plant or at the Utility’s Diablo Canyon nuclear power plant. In 1999, the Utility sold all bond-financed facilities at the non-retired units of the Geysers geothermal power plant to Geysers Power Company, LLC pursuant to purchase and sales agreements stating that Geysers Power Company, LLC will use the bond-financed facilities solely as pollution control facilities for so long as any tax-exempt pollution control bonds issued to finance the Geysers project are outstanding. Except for components that may have been abandoned in place or disposed of as scrap or that are permanently non-operational, the Utility has no knowledge that Geysers Power Company, LLC intends to cease using the bond-financed facilities solely as pollution control facilities.

Revolving Credit Facilities Subject to Compromise

PG&E Corporation's and the Utility's revolving credit facilities have been subject to an automatic and immediate acceleration as a result of the Chapter 11 Cases. Prior to the Chapter 11 Cases, proceeds from the revolving credit facilities were used for working capital, the repayment of commercial paper, and other corporate purposes.

Contractual Repayment Schedule

PG&E Corporation and the Utility have entered into the Noteholder RSA with Consenting Noteholders which provides for, among other things, (i) the refinancing of the Utility’s senior unsecured debt in satisfaction of all claims arising out of the Utility Short-Term Senior Notes, the Utility Long-Term Senior Notes and the Utility Funded Debt, and (ii) the reinstatement of the Utility Reinstated Senior Notes, in each case pursuant to the Proposed Plan and upon the terms and conditions set forth in the Noteholder RSA. See “Restructuring Support Agreement with the Ad Hoc Noteholder Committee” in Note 2 for further information on the Noteholder RSA.

PG&E Corporation’s and the Utility’s existing long-term debt is in default, and the Accelerated Direct Financial Obligations became immediately due and payable upon the commencement of the Chapter 11 Cases. PG&E Corporation’s and the Utility’s combined stated long-term debt principal repayment amounts at December 31, 2019 are reflected in the table below:


(in millions,
except interest rates)	2020				2021			2022			2023			2024			Thereafter			Total
PG&E Corporation
Variable interest rate as of December 31, 2019	2.96		%		—		%	3.24		%	—		%	—		%	—		%	2.96		%
Variable rate obligations	$	350			$	—		$	300		$	—		$	—		$	—		$	650
Utility
Average fixed interest rate	3.50		%		3.80		%	2.31		%	3.83		%	3.60		%	4.80		%	4.52		%
Fixed rate obligations	$	800			$	550		$	500		$	1,175		$	800		$	13,800		$	17,625
Variable interest rate as of December 31, 2019	various			⁽¹⁾	—		%	3.04		%	—		%	—		%	—		%	8.00		%
Variable rate obligations	$	1,013			$	—		$	2,888		$	—		$	—		$	—		$	3,901
Total consolidated debt	$	2,163			$	550		$	3,688		$	1,175		$	800		$	13,800		$	22,176

⁽¹⁾At December 31, 2019, the average interest rates for the pollution control bonds and the term loan were 8.00% and 2.36%, respectively.

Commercial Paper Programs

As of December 31, 2019, PG&E Corporation and the Utility terminated their respective programs commercial paper programs and had no commercial paper borrowings outstanding.