San Francisco-based Pacific Gas & Electric Co. last week priced its second rate reduction transaction of the year, an $845 million offering via Barclays Capital, Citigroup Global Markets and Morgan Stanley as joint-lead underwriters. The deal is the second part of the company's $3 billion rate reduction bond, also called energy recovery bonds or stranded assets, issuance program authorized by the California Public Utility Commission last year.

The deal, tagged 2005-2, priced a two-year A1 tranche at three basis points under swaps, and the five-year A2 tranche priced at two basis points over swaps, both on the tight rim of guidance. The 6.8-year A3 tranche priced at six basis points over swaps, flat to guidance. All three tranches of the deal were rated triple-A.

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