As of the most recent quarterly filing the company had $42 billion dollars of long term debt. The issue is the bond market knows the liabilities are coming and the company is all but incapable of issuing new debt at terms that are reasonable or sustainable. Rather than waiting for the death spiral the company is going in to bankruptcy court to restructure its liabilities.
This is the most recent current report indicating the chapter 11 filing
Note the last bullet point on the second page regarding the bankruptcy:
- assure PG&E has access to the financial resources necessary to support ongoing operations and enable PG&E to continue investing in its systems,
infrastructure and critical safety efforts, including investing in its Community Wildfire Safety Program, an additional precautionary measure
implemented following the 2017 Northern California wildfires to further reduce wildfire risk.
So when you scroll through and read a bit you get to this part:
PG&E does not intend to make the interest payment of approximately $21.6 million due on January 15, 2019, with respect to its outstanding 5.40% Senior
Notes due January 15, 2040 (the “2040 Notes”). Under the indenture governing the 2040 Notes, PG&E has a 30-day grace period to make the interest payment
before triggering an event of default.
Then a little farther down you get to the real reason:
PG&E believes that it currently could access, outside of a restructuring under Chapter 11, a significant amount of capital, but only in the form of secured
indebtedness, using the Utility’s assets to secure such additional funding, or in more esoteric forms of alternative capital that would be relatively dilutive or
expensive. The amount of any such additional secured indebtedness would be limited, however, by covenants applicable to the Utility’s outstanding securities and
credit agreements (including limitations on permitted secured indebtedness and a maximum ratio of total consolidated indebtedness to total consolidated
capitalization), and the amount of that additional secured indebtedness could be reduced by significant accounting accruals that the Utility may incur with respect
to the Camp Fire. Nevertheless, PG&E could extend its liquidity for an extended period of time by using its assets to secure the issuance of additional capital or by
accessing such forms of alternative capital. After a thorough review with management and financial and legal advisors, PG&E’s boards of directors have
concluded, however, that issuing substantial amounts of secured indebtedness or accessing such forms of alternative capital to extend PG&E’s liquidity outside of a
restructuring under Chapter 11 is not in the best interests of PG&E and its stakeholders, and would not address the fundamental issues and challenges PG&E faces,
Basically the company is saying 'our credit is so bad right now that while we CAN secure new funding the terms would be terrible. In continuing on with terrible financing terms we'd probably breach agreements that exist in already existing debt which would cause that debt to be callable, then the domino effect of that would spiral us in to oblivion.'