Vanguard Holds Half of PG&E's $920 Million Municipal Bonds

[ShokWaveRider]

How does one find out which VG Bond or MM funds hold PG&E debt?

 

[USGrant1962]

I think you need to dig into the Annual/Semi-annual reports. Here's Vanguard's latest for all of their corporate bond funds https://personal.vanguard.com/funds/reports/q392.pdf?2210147223

It is from July 31, 2018. It looks like the Annual will be published in a couple of weeks on Jan 31. Searching "Pacific Gas" shows 21 hits.

You can find links to these on the overview tab in each fund profile. E.G., https://investor.vanguard.com/mutual-funds/profile/VWEHX

 

[brukster]

Found this article:

https://www.thinkadvisor.com/2019/0...lion-municipal-bonds/?slreturn=20190015164705

 

[bingybear]

the bloomberg snippet I just watched noted they had been selling the bonds for a while. So it likely is not as bad as you might think. It also talked about some banks being a back stop for the bonds.

That said, if they are muni bonds, I would think you might find them in a muni money market.

 

[Masquernom]

Looks like the tax balanced fund is probably mostly in the clear. Looks like most of the holdings in the California muni bond funds.

 

[gauss]

From this Bloomberg article, I find Vanguard's holdings concentrated in 3 funds

The Vanguard Group holds about $415 million of municipal bonds issued on behalf of PG&E Corp., about half of the $920 million state and local debt sold for the California utility that’s edging toward bankruptcy because of the fallout from devastating wildfires.

But all but $2 million of the bonds held by Vanguard are backed by banks that act as buyers of last resort for the securities, insulating the money manager from risk, said Freddy Martino, a spokesman. Martino declined to comment on PG&E’s impending bankruptcy, though he said the firm’s holdings have declined about $15 million since its filings at the end of December.

Vanguard held $227.9 million of PG&E debt in its $5.6 billion California Municipal Money Market fund as of Dec. 31, according to data compiled by Bloomberg. It held another $110 million of PG&E’s debt in its California intermediate and long-term funds and $94.5 million in its $18.3 billion national money market fund.

 

[ShokWaveRider]

As long as they are not in VMMXX we will be OK. I think they are all treasuries.

 

[Another Reader]

Wellington has quite a bit. Over $100 million by my quick eyeball check. Assume Wellesley would have as much or more. Probably some loss in these two funds if the bonds are not insured.

 

[REWahoo]

Wellington has quite a bit. Over $100 million by my quick eyeball check. Assume Wellesley would have as much or more. Probably some loss in these two funds if the bonds are not insured.

Doesn't appear there is a lot to be concerned about:

...all but $2 million of the bonds held by Vanguard are backed by banks that act as buyers of last resort for the securities, insulating the money manager from risk...

 

[GrayHare]

psst Wellesley

 

[USGrant1962]

I guess I need to go back to fundamentals and ask why does one care? The whole point of owning mutual funds instead of picking individual stocks/bonds is to average out uncommon but normal events (bankruptcies, poor earnings, lawsuits, management corruption/incompetence, etc.).

Now if I was a stock picker or bond picker I might worry about PG&E, but I'm not so I am not.

The long-term average stock and bond returns include these events, and every other event. Ho hum...