S&P cuts PG&E ratings to junk, warns of further downgrade
The California power utility PG&E Corp has lost its investment-grade credit rating and remains under review by S&P Global Ratings for a further downgrade.
S&P cited political and regulatory pressure and uncertainty as the utility faces massive claims stemming from deadly wildfires.
PG&E saw its roughly $18 billion in bonds fall on Monday due to bankruptcy fears, according to Reuters.
The company has come under severe pressure since the fatal Camp fire in November compounded the company's woes.
It currently faces billions of dollars in liabilities related to wildfires in 2017 and 2018.
S&P cut the rating on both PG&E and its Pacific Power & Gas utility to "B" from its previous rating of "BBB-," the lowest tier of so-called investment-grade ratings.
The ratings agency could further cut the company's rating over the next few months if steps are not taken by authorities to improve the regulatory situation.
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That is an indication that the agency may be losing faith that lawmakers could rescue PG&E.
Earlier in the day, PG&E shares fell more than 22 percent and its largest bond, a $3 billion note due in March 2034, fell to a record-low price.
On Friday, sources told Reuters that PG&E was exploring filing for bankruptcy protection. The company was considering the move, for some or all of its businesses, as it fears a massive charge in the fourth quarter related to potential liabilities from wildfires.
The fires near the Northern California mountain community of Paradise swept through the town, killing at least 86 people in the deadliest and most destructive wildfire in the state's history.
PG&E had reported equipment problems near the origin of the fire around the time it began.