S&P: Various Rating Actions Taken On Eight LOC-Supported Bond Issues
Today's rating actions reflect the Aug. 15, 2016, raising of our long-term issuer credit rating (ICR) on Pacific Gas & Electric Co. to 'BBB+' from 'BBB' and the affirming of our short-term ICR on the company at 'A-2'.
The long-term and short-term components of our ratings on California Pollution Control Finance Authority's series 1996C, 1996E, 1996F, and 1997B and California Infrastructure and Economic Development Banks's series 2009A, 2009B, 2009C, and 2009D bonds are based on our long - and short-term ICR on, as well as the joint support provided by, Pacific Gas & Electricity Co., the obligor, and various letter of credit (LOC) providers, assuming a low correlation level between the LOC providers and obligor.
The following entities serve as LOC providers for the various bonds: Mizuho Bank Ltd. (A/A-1) for the series 1996C bonds;Sumitomo Mitsui Banking Corp. (A/A-1) for the series 1996E, 2009-C, and 2009-D bonds; TD Bank N. A. (AA-/A-1+) for the series 1996F bonds;Canadian Imperial Bank of Commerce (A+/A-1 for the series 1997B bonds. The long-term components of our ratings address our expectation of full and timely payments of interest and principal when the bondholders have not exercised the put option. The short-term components of our ratings address our expectation of full and timely payments of interest and principal when the bondholders have exercised the put option.
In view of the bonds' structures, changes to our ratings on these bonds can result from, among other things, changes to our ratings on the LOC providers or the obligor; changes to our correlation assumptions; expiration or termination of the LOCs; or amendments to the transactions' terms.