SRE
Sempra
NYSE
8-K: Southern California Gas Company Issues $600 Million in First Mortgage Bonds
Sentiment:
Debt Issuance Announcement
9 August 2024 4:45 PM
Southern California Gas Company has successfully priced a $600 million offering of 5.050% First Mortgage Bonds due in 2034.
Capital raise
Southern California Gas Company is raising $600 million through the issuance of First Mortgage Bonds.
The net proceeds are estimated to be approximately $593.2 million after deducting the underwriting discount.
Summary
- Southern California Gas Company, a subsidiary of Sempra, has entered into an underwriting agreement to issue and sell $600 million in aggregate principal amount of its 5.050% First Mortgage Bonds, Series CCC, due 2034.
- The bonds were sold to underwriters for resale at a public offering price of 99.514% of the principal amount.
- The offering is being conducted under a prospectus supplement and related prospectus filed with the U.S. Securities and Exchange Commission.
- The bonds are scheduled to be delivered on August 14, 2024.
- The net proceeds from the sale of the bonds are approximately $593.2 million, after deducting the underwriting discount but before deducting the company's estimated offering expenses.
Sentiment
Score: 7
Explanation: The document reflects a standard financial transaction, with no significant positive or negative surprises. The bond issuance is a routine activity for a utility company, and the terms appear to be in line with market expectations.
Positives
- The successful issuance of $600 million in bonds provides Southern California Gas Company with significant capital.
- The offering was well-received by the market, as evidenced by the pricing at 99.514% of the principal amount.
- The bonds have a defined maturity date of September 1, 2034, providing clarity for investors.
Risks
- The company is subject to standard market risks associated with debt offerings.
- Changes in interest rates could impact the value of the bonds.
- The company's financial performance could affect its ability to meet its obligations under the bonds.
Future Outlook
The company intends to use the net proceeds from the bond sale for general corporate purposes as outlined in the prospectus.
Industry Context
This bond issuance is a typical financing activity for a utility company like Southern California Gas Company, allowing it to raise capital for operations and investments. It reflects the ongoing need for infrastructure funding in the energy sector.
Comparison to Industry Standards
- The bond issuance by Southern California Gas Company is comparable to other utility companies raising capital through debt markets.
- For example, similar issuances by companies like Pacific Gas and Electric Company (PCG) or Consolidated Edison (ED) often involve similar structures and terms.
- The 5.050% coupon rate and 5.112% yield are within the typical range for investment-grade utility bonds at the time of issuance, reflecting the current interest rate environment and the company's credit rating.
- The spread of +110 basis points over the benchmark treasury is also consistent with market conditions for similar issuers.
Stakeholder Impact
- Shareholders will see the company's capital structure change with the addition of new debt.
- Creditors will have a new bond issuance to consider.
- Customers may indirectly benefit from the company's ability to fund infrastructure projects.
Next Steps
- The bonds will be delivered to the underwriters on August 14, 2024.
- The company will use the net proceeds for general corporate purposes.
Key Dates
- 1940-10-01: Date of the Base Indenture.
- 2023-04-27: Date of the Base Prospectus.
- 2024-08-08: Date of the Underwriting Agreement and Preliminary Prospectus Supplement.
- 2024-08-14: Scheduled settlement date for the bonds and date of the Current Supplemental Indenture.
- 2034-09-01: Maturity date of the bonds.
Keywords
First Mortgage Bonds, Debt Offering, Southern California Gas Company, Sempra, Underwriting Agreement, Fixed Income, Bond Issuance
SRE
Sempra
NYSE
Sector: Utilities
Filings with Classifications
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Debt Offering Announcement
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Capital raise
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Quarterly Report
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Earnings Release
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Better than expected
28 March 2025 4:14 PM
Proxy Statement
- Sempra's three-year total shareholder return far outpaced the return of the S&P 500 Utilities Index and more than tripled the returns of the S&P 500 and S&P 500 Utilities Indices since the beginning of this century (from December 31, 1999 through December 31, 2024).
Capital raise
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Debt Offering
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- The net proceeds are estimated to be approximately $842.1 million after deducting the underwriting discount but before deducting the Companys estimated offering expenses.
Worse than expected
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Annual Report
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25 February 2025 4:57 PM
Annual Report
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- The first and second trains of the PA LNG Phase 1 project are expected to commence commercial operations in 2027 and 2028, respectively, which is later than previously anticipated.
Capital raise
25 February 2025 4:57 PM
Annual Report
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Worse than expected
25 February 2025 10:54 AM
Earnings Release
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- The revision of the full-year 2025 EPS guidance range to $4.30 to $4.70 may be viewed negatively.
Capital raise
21 November 2024 4:05 PM
Debt Offering
- Sempra closed a public offering of $400 million of 6.625% Fixed-to-Fixed Reset Rate Junior Subordinated Notes due 2055 and $600 million of 6.550% Fixed-to-Fixed Reset Rate Junior Subordinated Notes due 2055.
- The total proceeds to Sempra from the sale of the notes were approximately $990 million, after deducting underwriting discounts but before deducting offering expenses estimated at $1.7 million.
Worse than expected
6 November 2024 3:40 PM
Quarterly Report
- Sempra's third quarter earnings were worse than the same period last year due to lower revenues and higher interest expenses.
- Sempra California's earnings were worse than the same period last year due to lower income tax benefits and higher net interest expenses.
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Capital raise
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Quarterly Report
- Sempra established an ATM program to offer and sell shares of common stock with an aggregate gross sales price of up to $3.0 billion.
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Capital raise
6 November 2024 10:50 AM
Quarterly Report
- The company has put in place a $3 billion at-the-market (ATM) equity offering program to support general corporate purposes including its future financing needs.
Worse than expected
6 November 2024 10:50 AM
Quarterly Report
- Third-quarter 2024 GAAP and adjusted earnings were lower compared to the same period in 2023.
- The company has lowered its full-year 2024 GAAP EPS guidance range.
Capital raise
9 September 2024 4:02 PM
Debt Offering Announcement
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- The net proceeds to the company are approximately $1.238 billion after deducting underwriting discounts.
Capital raise
9 August 2024 4:45 PM
Debt Issuance Announcement
- Southern California Gas Company is raising $600 million through the issuance of First Mortgage Bonds.
- The net proceeds are estimated to be approximately $593.2 million after deducting the underwriting discount.
Worse than expected
6 August 2024 3:48 PM
Quarterly Report
- Sempra's year-to-date earnings were worse than the same period last year, primarily due to lower income tax benefits and unrealized losses on commodity derivatives.
Capital raise
6 August 2024 3:48 PM
Quarterly Report
- Sempra completed an offering of 19,242,010 shares of its common stock in November 2023.
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Worse than expected
6 August 2024 10:54 AM
Quarterly Report
- Sempra's adjusted earnings for the second quarter of 2024 were lower than the same period in 2023.
- Sempra's adjusted earnings for the first six months of 2024 were also lower than the same period in 2023.
Delay expected
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Quarterly Report
- The Energa Costa Azul LNG Phase 1 project has experienced labor and productivity challenges, which has delayed the expected mechanical completion and first LNG to 2025, with commercial operations targeted for spring 2026.
Capital raise
31 May 2024 4:02 PM
Debt Offering Announcement
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- The proceeds will be used for general corporate purposes.
Capital raise
7 May 2024 4:29 PM
Quarterly Report
- Sempra completed an offering of 17,142,858 shares of common stock in November 2023.
- The company expects to settle forward sale agreements related to the offering by December 31, 2024, which may result in additional cash proceeds.
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Worse than expected
7 May 2024 4:29 PM
Quarterly Report
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Worse than expected
7 May 2024 11:02 AM
Quarterly Report
- Sempra's GAAP earnings decreased from $969 million in Q1 2023 to $801 million in Q1 2024.
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Better than expected
17 April 2024 4:18 PM
Proxy Statement Supplement
- Sempra achieved record revenue of $16.7B in 2023.
- GAAP EPS has grown at a 22.9% CAGR and adjusted EPS has grown at a 10.3% CAGR from 2018-2023.
- Sempra increased its five-year capital plan by 20% to $48 billion.
Better than expected
25 March 2024 8:01 AM
Proxy Statement
- Sempra's business strategy helped the company deliver a series of record financial results in 2023.
- The company's total shareholder return has outpaced the return of the S&P 500 Utilities Index during the past one, three and five years.
- Sempra California reduced methane emissions by approximately 70% from 2015 levels through 2022.
- 2023 annual bonuses were achieved at 176% of target based on performance on ABP Earnings, Safety Measures, and Sustainability Measures.
- The overall payout for the 2021-2023 LTIP awards based on relative TSR and EPS growth was 163% of target.
Capital raise
19 March 2024 4:21 PM
Debt Issuance Announcement
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Capital raise
18 March 2024 4:40 PM
Debt Issuance Announcement
- Southern California Gas Company raised $500 million through the issuance of First Mortgage Bonds.
- The proceeds will be used for general corporate purposes.
Capital raise
14 March 2024 4:01 PM
Debt Offering Announcement
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Capital raise
13 March 2024 4:08 PM
Debt Offering Announcement
- Southern California Gas Company is raising $500 million through the issuance of First Mortgage Bonds.
- The net proceeds are estimated to be approximately $492.4 million after deducting underwriting discounts.
Better than expected
27 February 2024 10:55 AM
Annual Results
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Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.