DISTRESSED DAILY: Mizuho Sees Junk Rating for PG&E’s New Debt

All things considered, it’s easier to run a power utility with an investment-grade rating. PG&E Corp. might not get one after its rescue plan is in place, according to Mizuho Securities USA.

• Secured bonds will get IG treatment when PG&E emerges from bankruptcy, but the unsecured debt seems destined for junk status, according a report by a Mizuho team that includes Paul Fremont.
• They’re anticipating both the utility and the parent will initially be rated in the BB range.
  • “Given the high capital needs of PG&E, California politicians and regulators would be well-served to grant the company’s request ...