PG&E Bondholders Lose Fight Over Interest Rate in Bankruptcy (2)

PG&E Corp. bondholders, including Elliott Management Corp., Pacific Investment Management Co. and Oaktree Capital Management, will collect a lower-than-normal interest rate while the utility is in bankruptcy.

The bondholders lost their fight to keep the rates set in debt contracts on about $17.5 billion in notes that PG&E issued in the years before filing bankruptcy. As long as PG&E remains under court protection, interest accrues at the so-called federal judgment rate, or 2.59%, U.S. Bankruptcy Judge Dennis Montali said in an opinion filedlate Monday night. PG&E shares rose as much as 2.4%.

The ruling is another victory ...