Pacific Gas & Electric will sell $6.7 billion in bonds secured by a first mortgage on utility properties to help pay creditor claims of $12 billion as it emerges from bankruptcy protection.
California's largest utility agreed to sell $8 billion of debt under its court-approved reorganization plan.
Lehamn Brothers Holding and UBS will manage the offering.
Pacific Gas filed for bankruptcy protection in April 2001 after amassing $9 billion of debt buying electricity at prices that soared during California's energy crisis.