) business wing, Southern California Gas Co. (SoCalGAs) has
completed the issuance of $350 million, 3.75% 30-year mortgage
bonds due September 15, 2042. The interest on the bonds will be
paid on a semi-annual basis on March 15 and September 15.
Sempra Energy's unit will utilize the proceeds from this sale to
finance its debt obligations especially the ones which are
short-term and for general corporate purposes. On behalf of the
company, various multinational banks will act as co-managers in
this financial transaction.
Previously, in March 2012, Sempra Energy was involved in the
sale of $600 million, 2.3% senior notes due in 2017. In addition,
its subsidiary, San Diego Gas & Electric Company sold $250
million, 4.3% first mortgage bonds due 2042.
Sempra Energy's long-term debt as of June 30, 2012 surged
approximately to $10.3 billion from $9.6 billion at the end of the
second quarter 2011. Interest expenses in second quarter 2012 were
$113 million. Interest expenses are expected to escalate with this
fresh offering of bonds.
The company's debt-to-capital ratio at the end of second quarter
2012 stood at 52.7%, and with the issuance of bonds, the
debt-to-capital ratio will increase marginally to 53.5%. However,
with stable credit ratings of "Aa3" by Moody's, "A+" by Standard
& Poor and "AA-" by Fitch, we believe the company's credit
worthiness will improve in the U.S. market and it will
effectively meet its financial commitments in the near future.
Sempra Energy reiterated its 2012 pro forma earnings guidance
range of $4-$4.30 per share. However, including a pipeline charge
of 73 cents and a tax benefit of 19 cents per share, the company's
GAAP earnings per share are forecast in the range of $3.46 per
share to $3.76 per share.
The Zacks Consensus Estimates for the third quarter and full
year 2012 currently stand at $1.04 per share and $4.21 per share,
Sempra Energy's closest peer is
). Like PG&E Corporation, Sempra Energy presently maintains a
Zacks #3 Rank implying a short-term Hold rating.
Based in San Diego, California, Sempra Energy operates as an
energy services holding company worldwide. The company operates
utilities, develops new energy infrastructure, and provides
energy-related services to approximately 31 million consumers
worldwide. With market capitalization of $15.56 billion, the
company has 17,483 employees.
PG&E CORP (PCG): Free Stock Analysis Report
SEMPRA ENERGY (SRE): Free Stock Analysis Report
To read this article on Zacks.com click here.