How much capital did Sempra Energy raise from the Series C Preferred Stock offering?

Sempra Energy estimated net proceeds of approximately $891 million from the offering of 900,000 shares of its Series C Preferred Stock at $1,000 per share, after deducting underwriting discounts but before other offering expenses.

What are the key dividend features of the Series C Preferred Stock?

The Series C Preferred Stock pays cumulative dividends at a fixed rate of 4.875% per annum until October 15, 2025. After this date, the dividend rate will reset every five years based on the prevailing Five-year U.S. Treasury Rate plus a fixed spread of 4.550%. Dividends accumulate daily, whether or not declared or paid.

Under what circumstances can Sempra redeem the Series C Preferred Stock?

Sempra can redeem the Series C Preferred Stock in whole or in part at $1,000 per share during specific quarterly periods leading up to and around October 15, 2025, and every fifth year thereafter. Additionally, Sempra can redeem the stock in whole at $1,020 per share within 120 days following a 'Ratings Event'.

What are the implications of missed dividend payments on the Series C Preferred Stock?

If Sempra fails to pay full accumulated dividends on the Series C Preferred Stock for three or more consecutive or non-consecutive dividend periods, the number of directors on its board will automatically increase by two. Holders of the Series C Preferred Stock, along with other voting preferred stock, will then gain the right to elect two directors until all missed dividends are paid in full.

SRE/SREA 8-K: Shareholder Matters & Corporate Changes

Q: What is the primary purpose of this 8-K filing for Sempra Energy?

This 8-K filing serves to formally announce and detail the terms of Sempra Energy's newly established 4.875% Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock, Series C, including its dividend rate, reset provisions, redemption terms, and associated rights and restrictions.

Summary

Sempra Energy (SRE) filed an 8-K on June 14, 2020, to report on the establishment of its 4.875% Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock, Series C. This filing details the terms and conditions of this new preferred stock offering, which was priced on June 10, 2020, with an expected closing around June 19, 2020. The offering aims to raise approximately $891 million in net proceeds. The Series C Preferred Stock carries a fixed dividend rate of 4.875% until October 15, 2025, after which the rate will reset every five years based on the Five-year U.S. Treasury Rate plus a spread of 4.550%. The stock is perpetual, with no maturity date, but is redeemable by Sempra under specific conditions and at certain times, including a potential redemption at a premium (102%) following a Ratings Event. Crucially, the terms of this preferred stock place significant restrictions on Sempra's ability to pay dividends or repurchase common stock and other junior securities if it fails to meet its obligations to the Series C Preferred Stockholders. In cases of non-payment for extended periods, holders gain voting rights to elect directors.

Key Highlights

1Sempra Energy priced an offering of 900,000 shares of its 4.875% Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock, Series C, on June 10, 2020.
2The offering is expected to generate approximately $891 million in net proceeds for the company.
3The Series C Preferred Stock pays a fixed dividend of 4.875% per annum until October 15, 2025, after which it becomes a floating rate tied to U.S. Treasury rates plus a spread.
4The preferred stock is perpetual but redeemable by Sempra at par ($1,000) during specific periods, or at a premium ($1,020) following a 'Ratings Event'.
5The terms impose restrictions on the company's ability to pay dividends on common stock or repurchase junior securities if Series C dividends are in arrears.
6Failure to pay dividends for three or more dividend periods grants Series C Preferred Stockholders voting rights to elect two directors to Sempra's board.
7The offering is part of a registered public offering under a Form S-3 shelf registration statement.

SEMPRA 8-K Report, Rights Modification (Jun 15, 2020)

Summary

Key Highlights

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