DEBT AND CREDIT FACILITIES

9 Months Ended

Sep. 30, 2018

DEBT AND CREDIT FACILITIES

LINES OF CREDIT

On January 17, 2018, pursuant to the terms of the Sempra Energy and Sempra Global credit facilities, the amounts available under the lines of credit were increased by $250 million, from $1.0 billion to $1.25 billion, for Sempra Energy and by $850 million, from $2.335 billion to $3.185 billion, for Sempra Global. At September 30, 2018, Sempra Energy Consolidated had an aggregate of approximately $5.4 billion in three primary committed lines of credit for Sempra Energy, Sempra Global and the California Utilities to provide liquidity and to support commercial paper. The principal terms of these committed lines of credit, which expire in October 2020, are described below and in Note 5 of the Notes to Consolidated Financial Statements in the Annual Report. Available unused credit on these lines at September 30, 2018 was approximately $3.2 billion. Our foreign operations have additional general purpose credit facilities aggregating $1.7 billion, with approximately $1.0 billion available unused credit at September 30, 2018.



PRIMARY U.S. COMMITTED LINES OF CREDIT
(Dollars in millions)
	September 30, 2018
	Total facility			Commercial paper outstanding⁽¹⁾			Available unused credit
Sempra Energy⁽²⁾	$	1,250		$	—		$	1,250
Sempra Global⁽³⁾	3,185			(2,147		)	1,038
California Utilities⁽⁴⁾:
SDG&E	750			(48		)	702
SoCalGas	750			—			750
Less: combined limit of $1 billion for both utilities	(500		)	—			(500		)
	1,000			(48		)	952
Total	$	5,435		$	(2,195	)	$	3,240


⁽¹⁾	Because the commercial paper programs are supported by these lines, we reflect the amount of commercial paper outstanding as a reduction to the available unused credit.


⁽²⁾	The facility also provides for issuance of up to $400 million of letters of credit on behalf of Sempra Energy with the amount of borrowings otherwise available under the facility reduced by the amount of outstanding letters of credit. No letters of credit were outstanding at September 30, 2018.


⁽³⁾	Sempra Energy guarantees Sempra Global’s obligations under the credit facility.


⁽⁴⁾	The facility also provides for the issuance of letters of credit on behalf of each utility, subject to a combined letter of credit commitment of $250 million for both utilities. The amount of borrowings otherwise available under the facility is reduced by the amount of outstanding letters of credit. No letters of credit were outstanding at September 30, 2018.

Sempra Energy, SDG&E and SoCalGas must maintain a ratio of indebtedness to total capitalization (as defined in each of the applicable credit facilities) of no more than 65 percent at the end of each quarter. Each entity is in compliance with this and all other financial covenants under its respective credit facility at September 30, 2018.



CREDIT FACILITIES IN SOUTH AMERICA AND MEXICO
(U.S. dollar-equivalent in millions)
			September 30, 2018
		Denominated in	Total facility		Amounts outstanding				Available unused credit
Sempra South American Utilities⁽¹⁾:
	Peru⁽²⁾	Peruvian sol	$	456	$	(146	)	⁽³⁾	$	310
	Chile	Chilean peso	115		—				115
Sempra Mexico:
	IEnova⁽⁴⁾	U.S. dollar	1,170		(615		)		555
Total			$	1,741	$	(761	)		$	980


⁽¹⁾	The credit facilities were entered into to finance working capital and for general corporate purposes and expire between 2018 and 2021.


⁽²⁾	The Peruvian facilities require a debt to equity ratio of no more than 170 percent, with which we were in compliance at September 30, 2018.


⁽³⁾	Includes bank guarantees of $18 million.


⁽⁴⁾	Five-year revolver expiring in August 2020 with a syndicate of eight lenders.

Outside of these domestic and foreign committed credit facilities, we have bilateral unsecured letter of credit capacity with select lenders that is uncommitted and supported by reimbursement agreements. At September 30, 2018, we had approximately $603 million in letters of credit outstanding under these agreements.

WEIGHTED AVERAGE INTEREST RATES

The weighted average interest rates on total short-term debt at Sempra Energy Consolidated were 2.65 percent and 1.92 percent at September 30, 2018 and December 31, 2017, respectively. The weighted average interest rates on total short-term debt at SDG&E were 2.35 percent and 1.65 percent at September 30, 2018 and December 31, 2017, respectively. The weighted average interest rate on total short-term debt at SoCalGas was 1.64 percent at December 31, 2017.

LONG-TERM DEBT

Sempra Energy

On January 12, 2018, we issued the following debt securities and received net proceeds of $4.9 billion (after deducting discounts and debt issuance costs of $68 million):



NOTES ISSUED IN LONG-TERM DEBT OFFERING
(Dollars in millions)
Title of each class of securities	Aggregate principal amount		Maturity	Interest payments
Floating Rate⁽¹⁾ Notes due 2019	$	500	July 15, 2019	Quarterly
Floating Rate⁽²⁾ Notes due 2021	700		January 15, 2021	Quarterly
2.400% Senior Notes due 2020	500		February 1, 2020	Semi-annually
2.900% Senior Notes due 2023	500		February 1, 2023	Semi-annually
3.400% Senior Notes due 2028	1,000		February 1, 2028	Semi-annually
3.800% Senior Notes due 2038	1,000		February 1, 2038	Semi-annually
4.000% Senior Notes due 2048	800		February 1, 2048	Semi-annually


⁽¹⁾	Bears interest at a rate per annum equal to the 3-month LIBOR rate, plus 25 bps.


⁽²⁾	Bears interest at a rate per annum equal to the 3-month LIBOR rate, plus 50 bps.

The Floating Rate Notes due 2019 are not subject to redemption at our option. At our option, we may redeem some or all of the Floating Rate Notes due 2021 at any time on or after January 14, 2019 at the applicable redemption price per the terms of the notes. At our option, we may redeem some or all of the fixed rate notes of each series at any time at the applicable redemption price for such series of fixed rate notes.

We used a substantial portion of the net proceeds from this offering to finance a portion of the Merger Consideration and associated transaction costs, as we discuss in Note 5, and approximately $800 million to pay down commercial paper.

Ranking

The notes are unsecured and unsubordinated obligations, ranking on a parity in right of payment with all of our other unsecured and unsubordinated indebtedness and guarantees. The notes rank senior to all our existing and future indebtedness, if any, that is subordinated to the notes. The notes are effectively subordinated to any secured indebtedness we have or may incur (to the extent of the collateral securing that indebtedness) and are also effectively subordinated to all indebtedness and other liabilities of our subsidiaries.

SDG&E

On May 17, 2018, SDG&E completed its public offer and sale of $400 million of 4.15-percent, first mortgage bonds maturing in 2048. SDG&E used the proceeds from the offering to repay outstanding commercial paper.

SoCalGas

On May 15, 2018, SoCalGas completed its public offer and sale of $400 million of 4.125-percent, first mortgage bonds maturing in 2048. SoCalGas used the proceeds from the offering to repay outstanding commercial paper.

On September 24, 2018, SoCalGas completed its public offer and sale of $550 million of 4.30-percent, first mortgage bonds maturing in 2049. SoCalGas used the proceeds from the offering to repay outstanding commercial paper and for other general corporate purposes.

Sempra South American Utilities

Luz del Sur drew bank loans in 2018 as follows:



2018 BANK LOAN DRAWS – LUZ DEL SUR
(Dollars in millions)
Month issued	Amount at issuance		Interest rate		Maturity date
June⁽¹⁾	$	22	4.32	%	June 2021
July	20		4.96	%	July 2021
September⁽¹⁾	30		4.30	%	September 2020
September	8		4.40	%	September 2020


⁽¹⁾	Bank loans are included in amounts outstanding under Peruvian credit facilities in the Credit Facilities in South America and Mexico table above.

Sempra Renewables

At September 30, 2018, $63 million of long-term debt and $7 million of current portion of long-term debt at Sempra Renewables is classified as Liabilities Held for Sale on the Sempra Energy Condensed Consolidated Balance Sheet, as we discuss in Note 5.

INTEREST RATE SWAPS

We discuss our interest rate swaps to hedge cash flows in Note 8.