PG&E; Unit’s Rating Cut After Default
Nancy Rivera Brooks
PG&E; Corp.’s troubled National Energy Group subsidiary failed to make a $431-million debt payment Thursday and Standard & Poor’s cut the unit’s credit rating to D, its lowest rating.
NEG is San Francisco-based PG&E;’s unregulated arm, which builds and operates power plants and trades energy. That segment of the energy industry has been slammed by the collapse of Enron Corp., low power prices and tight credit.
PG&E; Chief Executive Robert D. Glynn Jr. said Wednesday that NEG did not have enough cash to pay several debts, including a $431-million principal payment on a revolving credit line due Thursday, a $52-million bond interest payment today and nearly $900 million in other debts due next year.
