ML040620453

Declaration of Sandip Sen in Support of Debtor'S Motion for Authority to Establish Cash-collateralized Letter of Credit Program and Facility to Secure Gas Purchases, and to Incur Secured Debt Related Thereto (the Motion)'

ML040620453
Person / Time
Site:	Diablo Canyon
Issue date:	02/23/2004
From:	Sen S Citicorp, Simpson, Thacher & Bartlett, LLP
To:	Office of Nuclear Reactor Regulation, US Federal Judiciary, Bankruptcy Court, Northern District of California
References
01-30923 DM, 94-0742640
Download: ML040620453 (4)

Text

I Mark J.Thompson David J. Mack SIMPSON THACHER & BARTLETT LLP I 3 425 Lexington Avenue New York, NewYork 10017 4 Tel. (212) 455-2000 5

ATTORNEYS FOR CITICORP USA, INC.

6 '3QS UNITED STATES BANKRUPTCY COURT 7

NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION 9

10 In re Case No. 01-30923 DM PACIFIC GAS AND ELECTRIC COMPANY, Chapter 11 Case 12 a California corporation, Date: February 26, 2004 13 Debtor. Time: 1:30 p.m..

Place: 235 Pine Street, 14 San Francisco, CA 1'5 Federil I.D. No. 94-0742640 Judge: Hon. Dennis Montali 16 DECLARATION OF SANDIP SEN IN SUPPORT OF DEBTOR'S MOTION FOR 17 AUTHORITY TO ESTABLISH CASH-COLLATERALIZED LETTER OF CREDIT PROGRAM AND FACILITY TO SECURE GAS PURCHASES, AND TO INCUR SECURED 18 DEBT RELATED THERETO (THE "MOTION")'

19 1. I, Sandip Sen am an officer of Citicorp USA, Inc., ("Citicorp"), proposed LC 20 Bank under the Interim LC Facility that the Debtor seeks authority to enter into pursuant to the 21 Motion. I make this declaration (this "Declaration") in support of the Motion and in support of a 22 finding that Citicorp has acted in "good faith," as such term is defined in Section 364(e) of the 23 Bankruptcy Code, in entering into the Interim LC Facility and in issuing the LCs under the 24 25 26 Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to such terms in the Motion.

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2 1 Interim LC Facility. I make this Declaration on personal knowledge and upon a review of the 2

Motion.

2. Citigroup Global Markets Inc., and certain of its affiliates (collectively,'

4 5 l"Citizroup") have provided and may in the future provide investment-banking services to the 6 lDebtor, PG&E Corporation, and their affiliates.

7 3. Citigroup has held and may in the future hold debt and/or equity securities 8 issued by the Debtor, PG&E Corporation, and/or various affiliates.

9 4. Citigroup Global Markets Inc., is ajoint lead manager of certain of the New 10 Money Notes and/or New Mortgage Bonds (as such terms are defined in the Plan) proposed to be issued by the Debtor pursuant to Section 7.2 of the Debtor's Plan.

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5. Citigroup Global Markets Inc., is a joint lead arranger under one or more of 13 the credit facilities proposed to be entered into by the Debtor pursuant to Section 7.3 of the 14 Debtor's Plan.

15 16 6. Because of the magnitude of the Debtor's chapter 11 case and the relatively 17 large number of parties in interest, it is impractical, if not impossible, for Citigroup to represent 18 that it has disclosed all of its relationships with all of the parties in interest herein; it should be 19 assumed that Citigroup has or may in the future have substantial commercial relationships with 20 any person or entity in this case that enters into transaction in the financial markets.

21 17. Citicorp has extensive experience in arranging and engaging in financing 22 facilities, including facilities such as the Interim LC Facility described in the Motion. Based on 23 such experience, Citicorp is prepared to enter into the Interim LC Facility with the Debtor and 24 issue the LCs.

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3.

8. Citicorp has conducted extensive, arms-length negotiations with the Debtor regarding the Interim LC Facility. Citicorp and the Debtor have been represented by separate counsel in connection with such negotiations.

5 9. As a financial institution experienced in financing facilities, including credit 6 facilities providing for the issuance of letters of credit, Citicorp believes that any investmnent-7 grade-rated financial institution proposed to serve as an LC Bank will require (acting on a commercially reasonable basis), as a condition to entering a facility such as the Interim LC 9 Facility with the Debtor and serving as an LC Bank, the bankruptcy-related terms described in 10 the Motion, including, without limitation, (i) that the Debtor will be required to post collateral to secure the LC Bank's exposure to the Debtor on a priming basis under Bankruptcy.Code Section 12 13 364(d)(1), and that (ii) the LC Bank has immediate and self-executing relief from the automatic 14 stay of Bankruptcy Code Section 3 62(a) to enforce its rights and remedies under the Interim LC 15 Facility it enters into with the Debtor. Citicorp believes that the bankruptcy-related provisions 16 that will be included in the Interim LC Facility are fair and reasonable based upon the 17 benchmarks and standards for financing transactions with Chapter 11 debtors, and that 18 comparable terms would be required by other financing institutions if the Debtor entered into a 19 financing facility such as the Interim LC Facility with other finiancial institutions.

20 10. Neither Citicorp nor Citigroup has made any payment promise or undertaking 21 to any officer or director of the Debtor, PG&E Corporation or any of their affiliates as a quidpro 22 quo for entering into the Interim LC Facility.

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4 1 I declare underpenalty ofpeuryunderthe lawsofthe United States ofAmericathat the foregoing is true and correct. Executed tis 23rd day of February, 2004 i;New York, New 3

York..

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6 Sandip Sen 6-MnaIg Director 7.

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