PG&E: A Fallen Angel

Yesterday, we posted about the possibility of PG&E filing for bankruptcy due to potential liability for the November 2018 California wildfire. Today, PG&E bondholders got bad news as S&P dropped the company's bond rating from BBB- to B, firmly in the junk bond category. The downgrade was attributed political and regulatory pressure, as well as the potential liabilities from the wildfire. S&P stated that the bond rating could be further lowered if PG&E did not articulate steps to preserve credit quality.