Bloomberg News (Aug. 3, 2018)

PG&E Bonds Belie Fear of Imminent Bankruptcy Over Wildfires

Utility giant PG&E Corp., facing billions of dollars in liabilities from deadly wildfires in California,has raised the prospect of bankruptcy as it lobbies the state to ease its burden.

...

But the bond market shows the talk may be premature. Even after a report this week that PG&E hired a debt restructuring firm, prices on some of its $17.8 billion of long-term securities don’t reflect a fire sale. In fact, the company sold more corporate securities Thursday. And in the credit default swaps market, where investors bet on the survival of companies, PG&E’s risk has risen, but not to levels seen for those on the brink.

“They’re not priced as though the world is ending,” said Nicholos Venditti, who oversees about $11 billion of local government debt at Thornburg Investment Management in Santa Fe, New Mexico, of the utility’s municipal bonds.

...even if PG&E had to pay $10 billion in claims
immediately, it has enough cash to absorb it.
— CreditSights Inc.