Company: PCG-PB
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0001004980-25-000010
Chunk: 277

Company: PG&E Corp
Filing Date: 2025-02-13
Form: 10-K
Item: Item 1A
Chunk 277
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 events; and

•limiting their ability to capitalize on business opportunities.

49

Under the terms of the agreements and indentures governing their respective indebtedness, PG&E Corporation and the Utility are permitted to incur additional indebtedness, some of which could be secured (subject to compliance with certain tests) and which could further accentuate these risks.  As a result of the high level of indebtedness, PG&E Corporation and the Utility may be unable to generate sufficient cash through operations to service such debt and may need to refinance such indebtedness at or prior to maturity and be unable to obtain financing on suitable terms or at all.  As a capital-intensive company, the Utility relies on access to the capital markets, particularly investment grade capital markets.  If the Utility were unable to access the capital markets or the cost of financing were to substantially increase, its financial condition, results of operations, liquidity, and cash flows could be materially affected.  Although the Utility is generally entitled to seek recovery of its cost of capital, because such requests are subject to CPUC review, the Utility may not successfully recover its cost of capital.  Even when cost recovery is granted, the timing of such recovery will generally not occur until after the costs are required to be paid.  The Utility’s ability to obtain financing, as well as its ability to refinance debt and make scheduled payments of principal and interest, are dependent on numerous factors, including the Utility’s levels of indebtedness, maintenance of acceptable credit ratings, financial performance, liquidity and cash flow, and other market conditions.  The Utility’s inability to service its substantial debt or access the financial markets on reasonable terms could have a material effect on PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity, and cash flows.

The documents that govern PG&E Corporation’s and the Utility’s indebtedness limit their flexibility in operating their business.

PG&E Corporation’s and the Utility’s material financing agreements, including certain of their respective credit agreements and indentures, contain various covenants restricting, among other things, their ability to:

•incur or assume indebtedness or guarantees of indebtedness;

•incur or assume liens;

•sell or dispose of all or substantially all of its property or business;

•merge or consolidate with other companies;

•enter into any sale-leaseback transactions; and

•enter into swap agreements.

In addition, the Utility’s DOE Loan Guarantee Agreement contains similar covenants as well as certain affirmative and negative covenants, events of default, and