Sempra subsidiary issues $850M in bonds

In a recent development, San Diego Gas & Electric Company (SDG&E), an indirect subsidiary of Sempra, has entered into an agreement to issue $850 million in First Mortgage Bonds. The bonds, bearing an interest rate of 5.400% and due in 2035, were sold to underwriters for public offering at 99.720% of their principal amount.

The transaction was facilitated through an underwriting agreement signed on Monday with a consortium of financial institutions, including CIBC (TSX:CM) World Markets Corp., Morgan Stanley & Co (NYSE:MS). LLC, TD Securities (USA) LLC, and U.S. Bancorp (BVMF:USBC34) Investments, Inc. The underwriters will handle the bonds’ resale as part of a registered public offering.

This financial move was structured under SDG&E’s effective shelf registration statement on Form S-3, as filed with the U.S. Securities and Exchange Commission (SEC). The details of the underwriting agreement have been made available in an exhibit attached to the company’s Current Report on Form 8-K.

The issuance of these bonds does not constitute an offer to sell or a solicitation of an offer to buy any securities. The sale of these securities is strictly by prospectus supplement and related prospectus, as mentioned in the SEC filing. The sale will not be conducted in jurisdictions or to individuals where or to whom it would be unlawful.

This financial event is part of Sempra’s broader financial strategy to manage its capital and invest in its subsidiary operations. Sempra, listed on the New York Stock Exchange under the ticker SRE, and its subsidiary SDG&E, are both headquartered in California and are key players in the energy and utilities sector.

The information reported here is based on the latest SEC filing by Sempra and SDG&E, reflecting the company’s ongoing financial activities and compliance with regulatory requirements.

In other recent news, Sempra Energy (NYSE:SRE) has been at the center of several analyst revisions following its fourth-quarter earnings report and updated guidance for 2025. BMO Capital Markets reduced its price target for Sempra Energy to $78 while maintaining an Outperform rating, citing a revised $56 billion capital plan expected to drive a 10% growth in the rate base. Jefferies downgraded the stock from Buy to Hold and slashed the price target to $77, expressing concerns about the company’s financial stability and regulatory challenges in California and Texas. Barclays (LON:BARC) also downgraded Sempra Energy from Overweight to Equal Weight, cutting its price target to $72 due to financial adjustments revealed in the fourth-quarter earnings call.

Meanwhile, BofA Securities adjusted its price target to $86 but maintained a Buy rating, highlighting a potential 22% upside despite recent stock declines. Guggenheim Securities lowered its price target to $87, also keeping a Buy rating, and noted skepticism about the company’s long-term EPS growth guidance of 7-9%. Analysts from both firms expressed the need for more clarity from Sempra Energy’s management regarding its financial and regulatory plans. Despite the recent adjustments, some analysts remain optimistic about the company’s growth potential, while others have adopted a more cautious stance.

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