As the high cost of electricity last summer takes its toll on the financial health of two California power distributors, the long-term effects that price surges might have on outstanding stranded-cost securitizations are up in the air.

Negative press surrounding the financial outlook for California utilities Pacific Gas & Electric and SoCal Edison has helped send stranded-cost bond spreads significantly wider recently. The bonds typically trade at five basis points wider than credit card paper, but have widened an additional five to 10 basis points over the past few weeks, to trade at 10 to 15 basis points over credit cards of comparable terms.

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