Jan 14 (Reuters) - Bonds of PG&E Corp, owner of the biggest U.S. power utility by number of customers, plunged on Monday after the company said it is preparing to file for Chapter 11 bankruptcy as it faces liabilities linked to wildfires in California.
Nearly all of PG&E’s roughly $18 billion of bonds were trading sharply lower, sending their yields, which move in the opposite direction, to record highs.
The drops were particularly large among its nearest maturities, with bonds maturing in October 2020 and May 2021 both falling by more than 7 points in price. Their yield spreads, or the measure of the additional yield demanded by investors to hold riskier corporate bonds over safer U.S. Treasury securities, shot to 12.65 and 11.16 percentage points, respectively. (Reporting By Dan Burns Editing by Chizu Nomiyama)