More than $20 million of Pacific Gas & Electric's paper traded in the mid- to high 80s as the state of California tries to pull the beleaguered utility away from bankruptcy. Dealers said this is one of the first trades of the bank debt in a while. Deutsche Bank was among those actively handling the paper. A market watcher observed, "There's been a lot of swaps, some default swaps, so there's a lot of trading." Meanwhile, the state has committed $10 billion to buy power for the companies' customers. "They seem to be trying to deal with that situation," a dealer said.
Last month the company announced it would default on most of its payments for December and January purchases. J.P. Morgan Chase leads several facilities totaling around $5 billion for Southern California Edison as well as several facilities totaling more than $3 billion PG&E.