Summary
Sempra (SRE) announced on May 31, 2024, the successful closing of a public offering and sale of $500 million in aggregate principal amount of its 6.875% Fixed-to-Fixed Reset Rate Junior Subordinated Notes due 2054. This issuance is an additional tranche that will form a single series with the previously issued $600 million of similar notes from March 2024. The company received approximately $490.2 million in net proceeds after underwriting discounts, which will be used for general corporate purposes. The notes carry a fixed interest rate of 6.875% until October 1, 2029, after which the rate will reset every five years based on the Five-year U.S. Treasury Rate plus a spread of 2.789%. A key feature of these junior subordinated notes is the company's option to defer interest payments for up to 20 consecutive semi-annual periods, subject to certain conditions. Sempra also retains the option to redeem the notes at par value under specific conditions, including after October 1, 2029, or upon certain specified events.
Key Highlights
- 1Sempra closed a $500 million public offering of 6.875% Fixed-to-Fixed Reset Rate Junior Subordinated Notes due 2054.
- 2These new notes are a "reopening" issuance, joining the existing $600 million of similar notes issued in March 2024.
- 3Net proceeds from the offering are approximately $490.2 million, intended for general corporate purposes.
- 4The notes have a fixed rate of 6.875% until October 1, 2029.
- 5Post-October 2029, the interest rate will reset every five years based on a benchmark U.S. Treasury rate plus a 2.789% spread.
- 6Sempra has the option to defer interest payments for up to 20 consecutive semi-annual periods.
- 7The company can redeem the notes at par value on or after October 1, 2029, or upon the occurrence of specific events.