Quote:
Originally Posted by billy ross
The irony is that it is expensive to be poor, and PGW is a great example of that. When you have a poor credit rating it is expensive to borrow. PGW needs to fix its credit rating, but while it is doing so it seems to want another entity to borrow the money so that interest rates can be lowered. It is essentially asking for a co-signer. When you are running a business you need to look at all kinds of ways to cut costs. Interest expense is one of them. I have no problem with PGW enlisting a third party so that it can have lower interest expenses. Of course it would be better for PGW to get its house in order so that it can be a rock-solid borrower, but again that doesn't happen overnight. I'll repeat - if in 5 years PGW can have paid off one third of its debt then great things are afoot.
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I see it more like what enron did, taking out debt for revenue generating opportunities but leaving it off the books in subsidiary companies. co-signing would be an expllicity guarantee form the city of Philadelphia, not shifting it off the books. I do have a problem with PGW moving its debt onto the taxpayers books, it merely obfuscates the picture. It should act like any other company and reduces expenses it controls, pay down debt. Like I said, according to the Inquirer, PGW has the highest employee to customer ratio in the industry. that's what they need to address, not sticking taxpayers with the debt.