After a significant downgrading of Pacific Gas & Electric and Southern California Edison's corporate bond ratings to junk status resulting from payment defaults, market observers were made aware of the potential impact these problems could have on the capital markets.

SoCal Edison's bond rating was downgraded to D, for default by Standard & Poor's Corporate Ratings Group, after refusing to pay $596 million in debt obligations, while PG&E was downgraded to CC on Credit Watch Negative (ASR, 1/22/01).

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