PG&E Corp., which is slated to file Chapter 11 on Jan. 29, announced that it entered into a commitment letter for debtor-in-possession financing with JPMorgan Chase Bank, N.A, Bank of America, N.A., Barclays Bank PLC and Citigroup Global Markets Inc. pursuant to which the Commitment Parties committed to provide $5.5 billion in senior secured superpriority debtor-in-possession credit facilities in the form of (i) a revolving credit facility in an aggregate amount of $3.5 billion, a term loan facility in an aggregate principal amount of $1.5 billion and a delayed draw term loan facility in an aggregate principal amount of $500 million, subject to the terms and conditions set forth therein.

Borrowings under the DIP Facilities would be senior secured obligations of the Utility, secured by substantially all of the Utility’s assets and entitled to superpriority administrative expense claim status in the Utility’s bankruptcy case. The Utility’s obligations under the DIP Facilities would be guaranteed by the Corporation, and such guarantee would be a senior secured obligation of the Corporation, secured by substantially all of the Corporation’s assets and entitled to superpriority administrative expense claim status in the Corporation’s bankruptcy case. The scheduled maturity of the DIP Facilities would be December 31, 2020, subject to the Utility’s option to extend the maturity to December 31, 2021 if certain terms and conditions are satisfied. The Utility will pay customary fees and expenses in connection with obtaining the DIP Facilities.

The closing of the DIP Facilities would be subject to, among other conditions, the execution of definitive documentation and approval by the Bankruptcy Court. PG&E would seek interim approval of the DIP Facilities, and availability of a portion of the DIP Revolving Facility in the amount of $1.5 billion, at an interim hearing in the Bankruptcy Court shortly after its filing of the Chapter 11 cases on or about January 29, 2019, and final approval, and availability of the remaining amount of DIP Facilities in the amount of $4.0 billion, at a final hearing. PG&E is unable to predict the date of the final hearing but expects it to occur within 30 to 45 days after the petition date.

PG&E expects that the DIP Facilities will provide it with sufficient liquidity to fund its ongoing operations, including its ability to provide safe service to customers during the Chapter 11 cases. PG&E currently expects the Chapter 11 cases to take, subject to satisfaction of certain terms and conditions, approximately two years, but as described above, the DIP Facilities provide for an extension of one-year exercisable by the Utility at its option.