Photo:.
David Paul Morris/Bloomberg News.
A California personal bankruptcy court has sided with electrical utility.
PG&E Corp.
in its battle with bondholders over the interest rate that it must pay on its financial obligations while under insolvency court defense.
Judge.
Dennis Montali.
of the U.S. Personal Bankruptcy Court in San Francisco Tuesday ruled that the shareholders are owed the federal rate of 2.59%, a decision anticipated to lower the business’s interest problem by about $550 million when it exits personal bankruptcy.
A committee of shareholders consisting of Elliott Management Corp. and Pacific Financial investment Management Co. argued they were owed accrued interest at the original agreement rate of interest– as much as 6.05%on bonds due in2034 Costs of the business’s 2034 bonds fell about 1.6%to 104.75 cents on the dollar after the decision, according to data from.
Shareholders likewise contend that PG&E must pay them a premium if it retires debt they own early, or leave the bonds exceptional at the agreement rate of interest. Such an interpretation would make the 2034 bonds worth over 120 cents on the dollar and boost total bondholder recoveries by about $1.5 billion. A hearing on the issue is arranged for January.
A spokesman for the shareholder committee could not right away be reached for remark.
Compose to Matt Wirz at matthieu.wirz@wsj.com and Patrick Fitzgerald at patrick.fitzgerald@wsj.com
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