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DEBT AND CREDIT FACILITIES

3 Months Ended

Mar. 31, 2020

DEBT AND CREDIT FACILITIES

LINES OF CREDIT

Primary U.S. Committed Lines of Credit

At March 31, 2020, Sempra Energy Consolidated had an aggregate capacity of $6.7 billion in four primary U.S. committed lines of credit, which provide liquidity and support commercial paper. The principal terms of these committed lines of credit, which expire in May 2024, are described below and in Note 7 of the Notes to Consolidated Financial Statements in the Annual Report.



PRIMARY U.S. COMMITTED LINES OF CREDIT
(Dollars in millions)
	March 31, 2020
	Total facility		Commercial paper outstanding⁽¹⁾			Lines of credit outstanding			Available unused credit
Sempra Energy⁽²⁾	$	1,250	$	—		$	(1,250	)	$	—
Sempra Global⁽³⁾	3,185		(1,225		)	—			1,960
SDG&E⁽⁴⁾	1,500		—			(200		)	1,300
SoCalGas⁽⁴⁾	750		—			—			750
Total	$	6,685	$	(1,225	)	$	(1,450	)	$	4,010


⁽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 $200 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. Subject to obtaining commitments from existing or new lenders and satisfaction of other specified conditions, Sempra Energy has the right to increase the letter of credit commitment up to $500 million. No letters of credit were outstanding at March 31, 2020.


⁽³⁾	Commercial paper outstanding is before reductions of unamortized discount of $1 million at Sempra Global.

⁽⁴⁾

The facility also provides for issuance of $100 million of letters of credit on behalf of the borrowing utility with the amount of borrowings otherwise available under the facility reduced by the amount of outstanding letters of credit. Subject to obtaining commitments from existing or new lenders and satisfaction of other specified conditions, the borrowing utility has the right to increase the letter of credit commitment up to $250 million. No letters of credit were outstanding at March 31, 2020.

Sempra Energy, SDG&E and SoCalGas each must maintain a ratio of indebtedness to total capitalization (as defined in each of the applicable credit facilities) of no more than 65% at the end of each quarter. At March 31, 2020, each entity was in compliance with this ratio and all other financial covenants under its respective credit facility.

At March 31, 2020, the $200 million outstanding under SDG&E’s line of credit was classified as long-term debt based on management’s intent and ability to maintain this level of borrowing on a long-term basis either supported by this credit facility or by issuing long-term debt. This classification had no impact on SDG&E’s cash flows.

Foreign Committed Lines of Credit

Our foreign operations in Mexico have additional general-purpose credit facilities aggregating $1.9 billion at March 31, 2020. The principal terms of these credit facilities are described below.



FOREIGN COMMITTED LINES OF CREDIT
(U.S. dollar equivalent in millions)
	March 31, 2020
Expiration date of facility	Total facility		Amounts outstanding			Available unused credit
February 2024⁽¹⁾	$	1,500	$	(1,364	)	$	136
April 2022⁽²⁾	100		(100		)	—
September 2021⁽³⁾	280		(280		)	—
Total	$	1,880	$	(1,744	)	$	136


⁽¹⁾	Five-year revolving credit facility with a syndicate of 10 lenders.


⁽²⁾	Three-year revolving credit facility with Scotiabank Inverlat, S.A. Withdrawals may be made for up to one year from April 11, 2019 in either U.S. dollars or Mexican pesos.


⁽³⁾	Two-year revolving credit facility with The Bank of Nova Scotia. Withdrawals may be made for up to two years from September 23, 2019 in U.S. dollars.

Letters of Credit

Outside of our domestic and foreign committed credit facilities, we have bilateral unsecured standby letter of credit capacity with select lenders that is uncommitted and supported by reimbursement agreements. At March 31, 2020, we had approximately $615 million in standby letters of credit outstanding under these agreements.

TERM LOANS

In March 2020, Sempra Energy borrowed $1,524 million, net of $1 million of debt issuance costs, under a 364-day term loan, which has a maturity date of March 16, 2021 with an option to extend the maturity date to September 16, 2021, subject to receiving the consent of the lenders. Borrowings bear interest at benchmark rates plus 80 bps (1.72% at March 31, 2020). On April 1, 2020, Sempra Energy borrowed an additional $75 million under the term loan.

In March 2020, SDG&E borrowed $200 million under a 364-day term loan, which has a maturity date of March 18, 2021 with an option to extend the maturity date to September 17, 2021, subject to receiving the consent of the lenders. Borrowings bear interest at benchmark rates plus 80 bps (1.73% at March 31, 2020). SDG&E classified this term loan as long-term debt based on management’s intent and ability to maintain this level of borrowing on a long-term basis by issuing long-term debt. This classification had no impact on SDG&E’s cash flows.

The term loans provide Sempra Energy and SDG&E with additional liquidity outside of their respective committed lines of credit.

WEIGHTED-AVERAGE INTEREST RATES

The weighted-average interest rates on the total short-term debt at March 31, 2020 and December 31, 2019 were as follows:



WEIGHTED-AVERAGE INTEREST RATES

	March 31, 2020		December 31, 2019
	March 31, 2020		December 31, 2019
Sempra Energy Consolidated	2.41	%	2.31	%
SDG&E	N/A		1.97
SoCalGas	N/A		1.86

LONG-TERM DEBT

SDG&E

In April 2020, SDG&E issued $400 million of 3.32% first mortgage bonds maturing in 2050 and received proceeds of $395 million (net of debt discount, underwriting discounts and debt issuance costs of $5 million). SDG&E used $200 million of the proceeds from the offering to repay borrowings on its line of credit and expects to use the remaining proceeds for working capital and other general corporate purposes, which may include the repayment of indebtedness.

SoCalGas

In January 2020, SoCalGas issued $650 million of 2.55% first mortgage bonds maturing in 2030. We received proceeds of $643 million (net of debt discount, underwriting discounts and debt issuance costs of $7 million). SoCalGas used the proceeds from the offering to repay outstanding commercial paper and for other general corporate purposes.

Sempra Mexico

In November 2019, IEnova entered into a financing agreement with International Finance Corporation and North American Development Bank to finance and/or refinance the construction of solar generation projects in Mexico. Under this agreement, in April 2020, IEnova borrowed $100 million from Japan International Cooperation Agency, with loan proceeds of $98 million (net of debt issuance costs of $2 million). The loan matures in November 2034 and bears interest based on 6-month LIBOR plus 150 bps. IEnova entered into a floating-to-fixed interest rate swap, resulting in a fixed rate of 2.38%.

Sempra LNG

As we discuss in “Shareholders’ Equity and Noncontrolling Interests – Other Noncontrolling Interests – Sempra LNG” in Note 1, notes payable totaling $22 million due October 1, 2026 were converted to equity by the minority partner in Liberty Gas Storage LLC and are no longer outstanding.