Summary
Sempra Energy (SRE) announced on March 30, 2012, the establishment of new, larger, and longer-term revolving credit facilities across its corporate structure. The parent company, Sempra Energy, secured a $1.067 billion facility, while its subsidiary Sempra Global obtained a $2.189 billion facility, both maturing in March 2017. Additionally, its utility subsidiaries, San Diego Gas & Electric Company and Southern California Gas Company, collectively established an $877 million facility, also maturing in March 2017. These new credit lines replace existing agreements and provide Sempra with enhanced financial flexibility and liquidity for general corporate purposes and potentially for capital expenditures and other strategic initiatives. These facilities are structured with provisions for increases, subject to lender commitments, and include covenants such as maintaining a total indebtedness to total capitalization ratio not exceeding 65%. The agreements also stipulate standard representations, warranties, covenants, and events of default, including cross-default provisions tied to significant indebtedness. The establishment of these longer-term, larger credit facilities signals a proactive approach by Sempra Energy to ensure robust financial resources are available, which is a positive signal for investors regarding the company's commitment to financial stability and operational support.
Key Highlights
- 1Sempra Energy entered into a new five-year, $1.067 billion revolving credit facility, effective March 30, 2012, maturing March 30, 2017.
- 2Sempra Global, a subsidiary, secured a new five-year, $2.189 billion revolving credit facility, also effective March 30, 2012, and maturing March 30, 2017.
- 3Utility subsidiaries San Diego Gas & Electric and Southern California Gas Company established a combined five-year, $877 million revolving credit facility, effective March 30, 2012, maturing March 30, 2017.
- 4All new facilities replace prior agreements that were scheduled to expire in 2014, extending the maturity profile and increasing borrowing capacity.
- 5The facilities include options for Sempra Energy and Sempra Global to increase their respective credit lines by $250 million and $500 million, respectively, and for the utilities to increase their combined limit by $700 million, subject to lender commitments.
- 6Key financial covenants include maintaining a total indebtedness to total capitalization ratio not exceeding 65%.
- 7The agreements contain standard representations, warranties, covenants, and events of default, including cross-default provisions on indebtedness exceeding $100 million.