Roughly $20-30 million of Pacific Gas & Electric's bank debt traded above par last Thursday, creeping up from 97-98 after the market digested an 8-K filing from the company that included an accrued interest provision on its existing debt. Traders said Deutsche Bank and Merrill Lynch were involved in the trades. Levels on the debt reportedly climbed to the 101 1/2 102 1/2 range on the letters of credit and the 101-102 range on the revolver. Traders explained the surge in the debt levels came from optimism surrounding an expected approval of a provision in the company's Chapter 11 reorganization plan that would give Class 5 General Unsecured Claims accrued interest on their investment. "The claim is fully covered, you're not going to take a discount on your principle," explained one trader. Officials at Deutsche Bank and Merrill declined comment.
In November 2001, an estimated $20 million of PG&E's bank debt traded at 93 5/8, up from 82 1/2 from early in October (LMW, 11/11). The company filed for Chapter 11 bankruptcy on September 20, 2001. "[PG&E] continues to be one of the biggest axes in the loan market," one dealer explained. Calls to Peter Darbee, senior v.p. and cfo, were referred to a spokesperson who at press time did not return calls.