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PG&E Bonds Reach New Lows as S&P Cuts Five Notches to Junk

  • Company is said to weigh bankruptcy to limit fire liabilities
  • Fitch said a multiple-notch downgrade “cannot be ruled out”
Pacific Gas & Electric Co. workers repair a transformer in Paradise, California, on Nov. 15, 2018.
Photographer: David Paul Morris/Bloomberg
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PG&E Corp. shares plunged and bonds dropped to all-time lows on Tuesday after S&P Global Ratings slashed the electric company’s credit grades to the middle of the junk spectrum from investment grade, citing its limited options for managing wildfire liabilities.

The company’s shares fell as much as 17 percent to their lowest level since 2003, as investors worried about the potential for the company to file for bankruptcy. California investigators are looking into whether the utility’s equipment ignited the deadliest blaze in state history in 2018 as well as fires in 2017, probes that could leave the company with legal liabilities topping $30 billion.