We are reaffirming our $14.50 fair value estimate for 
PG&E PCG after bankruptcy court judge Dennis Montali made two rulings late Friday that will be critical in determining PG&E's postbankruptcy value. We are reaffirming our no-moat, stable moat trend, and very high uncertainty ratings. Montali's order to let the 2017 Tubbs fire victims pursue their jury trial against PG&E could be the more impactful of the two rulings. California fire investigators determined that PG&E's equipment did not spark the fire, which killed 22 people and destroyed 5,643 structures. However, victims are challengi ng that report. PG&E's $17.5 billion of fire charges taken to date could go substantially higher if the utility is found liable for Tubbs. The jury decision also could be a key factor the court uses to set an estimation value for all PG&E fire liabilities. That estimation value will determine how much new capital PG&E will have to raise to exit bankruptcy. This will determine the amount of shareholder dilution. Separately, Montali ruled that PG&E can present the first official bankruptcy exit plan, rejecting unofficial proposals from bondholders and insurers. We valued the bondholders' plan at $7 per share and the insurers' plan at $21 per share, as we detailed in an Aug. 12 note. For the entire note, click here.
Travis Miller
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