-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SvguVVaz7CeKmBicQMhkwsPNlNzDtDA4vMgiRhsaYfcnCzXcXCqZCZ47dlsgUosk KxW/U3IQ4cmIRxnXCysJ+A== 0001032210-02-001166.txt : 20020807 0001032210-02-001166.hdr.sgml : 20020807 20020807171945 ACCESSION NUMBER: 0001032210-02-001166 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020807 ITEM INFORMATION: Other events FILED AS OF DATE: 20020807 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PG&E GAS TRANSMISSION NORTHWEST CORP CENTRAL INDEX KEY: 0000075491 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS TRANSMISSION [4922] IRS NUMBER: 941512922 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-25842 FILM NUMBER: 02722096 BUSINESS ADDRESS: STREET 1: 1400 SW 5TH AVE CITY: PORTLAND STATE: OR ZIP: 97201 BUSINESS PHONE: 5038334000 MAIL ADDRESS: STREET 1: 1400 SW 5TH AVE CITY: PORTLAND STATE: OR ZIP: 97201 FORMER COMPANY: FORMER CONFORMED NAME: PACIFIC GAS TRANSMISSION CO DATE OF NAME CHANGE: 19950411 8-K 1 d8k.htm FORM 8-K Prepared by R.R. Donnelley Financial -- Form 8-K
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 8-K
 
CURRENT REPORT
 
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
Date of Report:  August 7, 2002
 
COMMISSION FILE NO. 0-25842
 
 
PG&E Gas Transmission, Northwest Corporation
(Exact name of registrant as specified in its charter)
 
California
  
94-1512922
(State or other jurisdiction of
incorporation or organization)
  
(I.R.S. Employer
Identification No.)
 
1400 SW Fifth Avenue, Suite 900, Portland, OR
  
97201
(Address of principal executive offices)
  
(Zip code)
 
Registrant’s telephone number, including area code:  (503) 833-4000
 

 
Item 5.    Other Events
 
On August 5, 2002 Moody’s Investors Service (Moody’s), a major credit rating agency, announced that it had changed the rating on the senior unsecured debt securities of PG&E National Energy Group, Inc. (PG&E NEG) to Ba2 from Baa2 and maintained its negative rating outlook. PG&E Gas Transmission, Northwest Corporation (PG&E GTN) is an indirect wholly owned subsidiary of PG&E NEG. Moody’s also announced that it had changed the rating on the senior unsecured debt of PG&E GTN to Baa2 from Baa1 with a negative rating outlook. PG&E GTN’s short-term rating for commercial paper was confirmed at Prime-2.
 
According to Moody’s, “The rating action for PG&E GTN … reflects the increased pressure that may be placed on subsidiary cash flow and liquidity to help support the parent’s energy merchant business.”
 
Moody’s also stated that “the negative outlook for PG&E GTN reflects the possibility that PG&E GTN could be called upon to provide a material amount of guarantees to support obligations of PG&E NEG or its trading company affiliate. While Moody’s recognizes the value provided to PG&E GTN through legal ring fencing, a material amount of counterparty obligations guaranteed by PG&E GTN could potentially weaken the protection provided by the ring fencing.”
 
PG&E NEG has reviewed its estimated sources and uses of cash over the next 12 months, and believes that its liquidity is sufficient to meet the anticipated cash requirements, including those associated with the rating agencies’ actions, including Moody’s action of August 5, 2002. The PG&E NEG’s liquidity analysis appears in its most recent quarterly report on Form 10-Q for the quarter ended June 30, 2002, filed with the U.S. Securities and Exchange Commission on August 2, 2002.
 
As PG&E GTN disclosed in its most recent quarterly report on Form 10-Q for the quarter ended June 30, 2002 filed with the U.S. Securities and Exchange Commission on August 2, 2002, at June 30, 2002 and December 31, 2001 guarantees, on behalf of PG&E NEG subsidiaries other than North Baja Pipeline, LLC, with a face value of $614.8 million and $985.4 million, respectively, were outstanding, with an overall net exposure of $60.7 million and $28.9 million, respectively, on the transactions supported by the guarantees. The net exposure is comprised of the amount of outstanding guarantees directly supporting underlying transactions, net of offsetting positions, cash, and other collateral. Also, at June 30, 2002 and December 31, 2001, a total of $13.0 million and $47.0 million, respectively, of guarantees were outstanding on behalf of North Baja Pipeline, LLC. PG&E GTN has significantly reduced the face amount of the guarantees during the first six months of 2002 and intends to further reduce this exposure to the extent possible.
 
PG&E GTN believes that it will have the ability to fully finance its operations and construction activities and to comply with all of the terms of its existing debt covenants not withstanding the financial situation or credit rating changes of any of its affiliates. The ratings agencies’ actions, including Moody’s action of August 5, 2002, will only slightly increase PG&E GTN’s cost to borrow money under its Credit Agreement which currently has no outstanding borrowings. (The increase in borrowing costs would only total $125,000 per year assuming that the full $125 million is outstanding under the Credit Agreement.)

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SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereto duly authorized.
 
PG&E GAS TRANSMISSION, NORTHWEST CORPORATION
    (Registrant)
By:
  
/S/    THOMAS E. LEGRO
   
Thomas E. Legro
Vice President and Controller
 
August 7, 2002

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