8-KOther EventsExhibits & Filings

SEMPRA 8-K Report, Corporate Update (Apr 7, 2020)

Filed April 7, 2020For Securities:SRESREA

Summary

Sempra Energy's indirect subsidiary, San Diego Gas & Electric Company (SDG&E), successfully closed a public offering of $400 million in 3.320% First Mortgage Bonds, Series UUU, due 2050. The offering, which was registered under a Form S-3, generated net proceeds of approximately $395.992 million after deducting underwriting discounts but before other estimated expenses. This issuance provides SDG&E with long-term financing at a fixed rate, enhancing its capital structure. Investors should note that these bonds mature in 2050 and will bear a fixed interest rate of 3.320% per annum, with semi-annual interest payments commencing in October 2020. The indenture allows for redemption prior to maturity under specific conditions. This debt issuance is a routine financing activity for a regulated utility, aimed at funding operations and capital expenditures.

Key Highlights

  • 1SDG&E completed a public offering of $400 million in 3.320% First Mortgage Bonds due 2050.
  • 2The bonds have a fixed interest rate of 3.320% per annum.
  • 3The maturity date for these bonds is April 15, 2050.
  • 4Interest payments are scheduled semi-annually on April 15 and October 15, starting October 15, 2020.
  • 5Net proceeds from the offering, after underwriting discounts, were approximately $395.992 million.
  • 6The issuance was registered under Sempra's Form S-3 (File No. 333-222650).
  • 7The bonds are redeemable prior to maturity at the Company's option under specified terms.

Frequently Asked Questions

This bond issuance is for Sempra Energy's indirect subsidiary, San Diego Gas & Electric Company (SDG&E). The purpose is to raise capital through long-term debt financing at a fixed interest rate to support its operations and capital needs.

The bonds have an aggregate principal amount of $400 million, a fixed interest rate of 3.320% per annum, and mature on April 15, 2050. Interest is paid semi-annually, beginning October 15, 2020.

SDG&E raised $400 million in aggregate principal amount of bonds. After deducting underwriting discounts but before other expenses, the net proceeds to the Company were approximately $395.992 million.

As with any debt instrument, investors face interest rate risk (if rates rise, the value of these lower-yielding bonds may decrease) and credit risk (the risk that SDG&E may not be able to make payments). The bonds are also redeemable prior to maturity, which could lead to reinvestment risk for bondholders if called when interest rates are lower.