XML 59 R10.htm IDEA: XBRL DOCUMENT  v2.3.0.11
Debt
6 Months Ended
Jun. 30, 2011
Debt

NOTE 4: DEBT

Revolving Credit Facilities - PG&E Corporation and the Utility

On May 31, 2011, PG&E Corporation entered into a $300 million revolving credit facility with a syndicate of lenders. This revolving credit facility replaced the $187 million revolving credit facility that PG&E Corporation entered into on February 26, 2007, as amended by the Amendment and Limited Consent Agreement, dated as of April 27, 2009. Also on May 31, 2011, the Utility entered into a $3.0 billion revolving credit facility with a syndicate of lenders. This revolving credit facility replaced the $1.9 billion revolving credit facility that the Utility entered into on February 26, 2007, as amended by the Amendment and Limited Consent Agreement, dated as of April 27, 2009, and the $750 million revolving credit facility that the Utility entered into on June 8, 2010. The revolving credit facilities have terms of five years and all amounts are due and payable on the facilities' termination date, May 31, 2016. At PG&E Corporation's and the Utility's request and at the sole discretion of each lender, the facilities may be extended for additional periods. PG&E Corporation and the Utility have the right to replace any lender who does not agree to an extension under the respective agreements.

The revolving credit facilities will be used primarily for working capital and other corporate purposes, including commercial paper back-up. The revolving credit facilities include sublimits for the issuance of standby and commercial letters of credit of $100 million for PG&E Corporation and $1.0 billion for the Utility. The revolving credit facilities also include commitments for swingline loans (loans that are made available on a same-day basis and are repayable in full within seven days) of $100 million for PG&E Corporation and $300 million for the Utility.

Subject to obtaining commitments from existing or new lenders and satisfaction of other specified conditions, PG&E Corporation and the Utility have the right to increase, in one or more requests, given not more frequently than once a year, the aggregate lenders' commitments under the revolving credit facilities by up to $100 million and $500 million, respectively, in the aggregate for all such increases.

Borrowings under the revolving credit facilities (other than swingline loans) will bear interest based, at PG&E Corporation's and the Utility's election, on (1) a London Interbank Offered Rate ("LIBOR") plus an applicable margin or (2) the base rate plus an applicable margin. The base rate will equal the higher of the following: the administrative agent's announced base rate, 0.5% above the federal funds rate, or the one-month LIBOR plus an applicable margin. Interest is payable quarterly in arrears, or earlier for loans with shorter interest periods. PG&E Corporation and the Utility also will pay a facility fee on the total commitments of the lenders under the revolving credit facilities. The applicable margins and the facility fees will be based on PG&E Corporation's and the Utility's senior unsecured debt ratings issued by Standard & Poor's Rating Services and Moody's Investor Service. Facility fees are payable quarterly in arrears.

The revolving credit facilities include usual and customary covenants for revolving credit facilities of this type, including covenants limiting liens to those permitted under PG&E Corporation's and the Utility's senior note indentures, mergers, sales of all or substantially all of PG&E Corporation's and the Utility's assets, and other fundamental changes. In addition, the revolving credit facilities require that PG&E Corporation and the Utility maintain a ratio of total consolidated debt to total consolidated capitalization of at most 65% as of the end of each fiscal quarter. The $300 million revolving credit facility agreement also requires that PG&E Corporation must own, directly or indirectly, at least 80% of the common stock and at least 70% of the voting capital stock of the Utility. At June 30, 2011, PG&E Corporation and the Utility were in compliance with all covenants under each of the revolving credit facilities.

 

At June 30, 2011, PG&E Corporation had $75 million of cash borrowings outstanding under its $300 million revolving credit facility which had an interest rate of 1.37%.

At June 30, 2011, the Utility had no cash borrowings and $319 million of letters of credit outstanding under its $3.0 billion revolving credit facility.

The Utility treats the amount of its outstanding commercial paper as a reduction to the amount available under its revolving credit facility. At June 30, 2011, the Utility had $870 million of commercial paper outstanding.

Utility

Senior Notes

On May 13, 2011, the Utility issued $300 million principal amount of 4.25% Senior Notes due May 15, 2021.

Pollution Control Bonds

The California Pollution Control Financing Authority and the California Infrastructure and Economic Development Bank have issued various series of tax-exempt pollution control bonds for the benefit of the Utility. The payments on the Series 1996 C, E, and F bonds; the Series 1997 B bonds; and the Series 2009 A-D bonds are made through draws on separate direct-pay letters of credit issued by a financial institution for each series. On May 31, 2011, new letters of credit were substituted for the letters of credit supporting the Series 2009 A-D bonds. The substitute letters of credit expire on May 31, 2016. In connection with the substitutions, the Utility entered into new reimbursement agreements related to the substitute letters of credit. Also on May 31, 2011, the Utility extended the letters of credit supporting the Series 1996 C, E, and F bonds, and the Series 1997 B bonds, and amended and restated the reimbursement agreements related to such bonds into a single reimbursement agreement. The new termination date of the letters of credit is May 31, 2016.

Other Short-term Borrowings

At June 30, 2011, the interest rate on the Utility's $250 million principal amount of Floating Rate Senior Notes, due October 11, 2011, was 0.87%. The interest rate for the Floating Rate Senior Notes is equal to the three-month LIBOR plus 0.58% and resets quarterly. On July 11, 2011, the interest rate was reset to 0.83%.

Energy Recovery Bonds

In 2005, PERF issued two separate series of bonds in the aggregate amount of $2.7 billion. PERF used the bond proceeds to purchase from the Utility the right, known as "recovery property," to be paid a specified amount from a dedicated rate component to be collected from the Utility's electricity customers. The total amount of bond principal outstanding was $636 million at June 30, 2011.

While PERF is a wholly owned subsidiary of the Utility, it is legally separate from the Utility. The assets (including the recovery property) of PERF are not available to creditors of the Utility or PG&E Corporation, and the recovery property is not legally an asset of the Utility or PG&E Corporation.

Pacific Gas and Electric Company [Member]
 
Debt

NOTE 4: DEBT

Revolving Credit Facilities - PG&E Corporation and the Utility

On May 31, 2011, PG&E Corporation entered into a $300 million revolving credit facility with a syndicate of lenders. This revolving credit facility replaced the $187 million revolving credit facility that PG&E Corporation entered into on February 26, 2007, as amended by the Amendment and Limited Consent Agreement, dated as of April 27, 2009. Also on May 31, 2011, the Utility entered into a $3.0 billion revolving credit facility with a syndicate of lenders. This revolving credit facility replaced the $1.9 billion revolving credit facility that the Utility entered into on February 26, 2007, as amended by the Amendment and Limited Consent Agreement, dated as of April 27, 2009, and the $750 million revolving credit facility that the Utility entered into on June 8, 2010. The revolving credit facilities have terms of five years and all amounts are due and payable on the facilities' termination date, May 31, 2016. At PG&E Corporation's and the Utility's request and at the sole discretion of each lender, the facilities may be extended for additional periods. PG&E Corporation and the Utility have the right to replace any lender who does not agree to an extension under the respective agreements.

The revolving credit facilities will be used primarily for working capital and other corporate purposes, including commercial paper back-up. The revolving credit facilities include sublimits for the issuance of standby and commercial letters of credit of $100 million for PG&E Corporation and $1.0 billion for the Utility. The revolving credit facilities also include commitments for swingline loans (loans that are made available on a same-day basis and are repayable in full within seven days) of $100 million for PG&E Corporation and $300 million for the Utility.

Subject to obtaining commitments from existing or new lenders and satisfaction of other specified conditions, PG&E Corporation and the Utility have the right to increase, in one or more requests, given not more frequently than once a year, the aggregate lenders' commitments under the revolving credit facilities by up to $100 million and $500 million, respectively, in the aggregate for all such increases.

Borrowings under the revolving credit facilities (other than swingline loans) will bear interest based, at PG&E Corporation's and the Utility's election, on (1) a London Interbank Offered Rate ("LIBOR") plus an applicable margin or (2) the base rate plus an applicable margin. The base rate will equal the higher of the following: the administrative agent's announced base rate, 0.5% above the federal funds rate, or the one-month LIBOR plus an applicable margin. Interest is payable quarterly in arrears, or earlier for loans with shorter interest periods. PG&E Corporation and the Utility also will pay a facility fee on the total commitments of the lenders under the revolving credit facilities. The applicable margins and the facility fees will be based on PG&E Corporation's and the Utility's senior unsecured debt ratings issued by Standard & Poor's Rating Services and Moody's Investor Service. Facility fees are payable quarterly in arrears.

The revolving credit facilities include usual and customary covenants for revolving credit facilities of this type, including covenants limiting liens to those permitted under PG&E Corporation's and the Utility's senior note indentures, mergers, sales of all or substantially all of PG&E Corporation's and the Utility's assets, and other fundamental changes. In addition, the revolving credit facilities require that PG&E Corporation and the Utility maintain a ratio of total consolidated debt to total consolidated capitalization of at most 65% as of the end of each fiscal quarter. The $300 million revolving credit facility agreement also requires that PG&E Corporation must own, directly or indirectly, at least 80% of the common stock and at least 70% of the voting capital stock of the Utility. At June 30, 2011, PG&E Corporation and the Utility were in compliance with all covenants under each of the revolving credit facilities.

 

At June 30, 2011, PG&E Corporation had $75 million of cash borrowings outstanding under its $300 million revolving credit facility which had an interest rate of 1.37%.

At June 30, 2011, the Utility had no cash borrowings and $319 million of letters of credit outstanding under its $3.0 billion revolving credit facility.

The Utility treats the amount of its outstanding commercial paper as a reduction to the amount available under its revolving credit facility. At June 30, 2011, the Utility had $870 million of commercial paper outstanding.

Utility

Senior Notes

On May 13, 2011, the Utility issued $300 million principal amount of 4.25% Senior Notes due May 15, 2021.

Pollution Control Bonds

The California Pollution Control Financing Authority and the California Infrastructure and Economic Development Bank have issued various series of tax-exempt pollution control bonds for the benefit of the Utility. The payments on the Series 1996 C, E, and F bonds; the Series 1997 B bonds; and the Series 2009 A-D bonds are made through draws on separate direct-pay letters of credit issued by a financial institution for each series. On May 31, 2011, new letters of credit were substituted for the letters of credit supporting the Series 2009 A-D bonds. The substitute letters of credit expire on May 31, 2016. In connection with the substitutions, the Utility entered into new reimbursement agreements related to the substitute letters of credit. Also on May 31, 2011, the Utility extended the letters of credit supporting the Series 1996 C, E, and F bonds, and the Series 1997 B bonds, and amended and restated the reimbursement agreements related to such bonds into a single reimbursement agreement. The new termination date of the letters of credit is May 31, 2016.

Other Short-term Borrowings

At June 30, 2011, the interest rate on the Utility's $250 million principal amount of Floating Rate Senior Notes, due October 11, 2011, was 0.87%. The interest rate for the Floating Rate Senior Notes is equal to the three-month LIBOR plus 0.58% and resets quarterly. On July 11, 2011, the interest rate was reset to 0.83%.

Energy Recovery Bonds

In 2005, PERF issued two separate series of bonds in the aggregate amount of $2.7 billion. PERF used the bond proceeds to purchase from the Utility the right, known as "recovery property," to be paid a specified amount from a dedicated rate component to be collected from the Utility's electricity customers. The total amount of bond principal outstanding was $636 million at June 30, 2011.

While PERF is a wholly owned subsidiary of the Utility, it is legally separate from the Utility. The assets (including the recovery property) of PERF are not available to creditors of the Utility or PG&E Corporation, and the recovery property is not legally an asset of the Utility or PG&E Corporation.