SDG&E issues million in bonds jointly led by minority-owned investment bank

Media Contact:
Stephanie Donovan

Financial Contact:
Glen Donovan

San Diego Gas & Electric

Sempra Energy

(877) 866-2066

(877) 736-7727


        SAN DIEGO, May 13, 2010 – San Diego Gas & Electric (SDG&E), a unit of Sempra Energy (NYSE: SRE), today closed a public offering of $250 million of 30-year first-mortgage bonds.  The transaction is a financial landmark for SDG&E – the first time it has used a minority-owned investment bank as co-lead in any bond offering. 

        As part of its overall commitment to supplier diversity, SDG&E selected Loop Capital Markets LLC, a Chicago-based, African-American-owned investment bank, to be one of four joint lead managers, along with Citigroup Global Capital Markets Inc., Deutsche Bank Securities Inc., and UBS Investment Bank.  SDG&E also selected minority-owned firms CastleOak Securities L.P. and SL Hare Capital, Inc. to co-manage the offering.  

        “SDG&E is proud of its ongoing commitment to provide opportunities for minority-owned banks and investment banking firms,” said Lee Schavrien, senior vice president of finance, regulatory and legislative affairs for SDG&E.  “Diversity is an everyday core value at SDG&E, and having Loop Capital Markets participate as a joint lead in our financial transactions is good for customers and for the communities we serve.”
        The bonds bear an interest rate of 5.35 percent and mature on May 15, 2040.  The proceeds of the bonds will be used mainly as general working capital and to fund SDG&E’s ongoing capital-investment program.  The bonds are rated “Aa3” by Moody’s Investors Service and “A+” by Standard & Poor’s Corp.

        “SDG&E continues to lead the way on diversity among California utilities,” said Michael R. Peevey, president of the California Public Utilities Commission (CPUC).  “The CPUC commends SDG&E for this important step and for its overall commitment that begins with proactive decisions in the boardroom to make diversity a core goal across the entire utility.”

        Last year, SDG&E reached a new milestone in spending with diverse business enterprises – businesses owned by women, minority, and disabled veterans (WMDVBEs) – according to a year-end report released by the utility.  In 2009, SDG&E made 29 percent of its purchases for products and services from WMDVBEs, which is significantly more than the CPUC’s 21-percent WMDVBE goal for the state’s investor-owned utilities.  Over the past 15 years, SDG&E has spent more than $1.4 billion on products and services with diverse suppliers and an additional $700 million on natural gas from these businesses.  SDG&E also has increased its investments with minority community-focused banking institutions.

        “SDG&E has consistently demonstrated its commitment to expanding opportunities for diverse suppliers,” said CPUC Commissioner Timothy Alan Simon.  “I applaud SDG&E for the noteworthy inclusion of a minority-owned company as an equal joint lead in a new bond issuance – a first in California history.  SDG&E has worked closely with the CPUC under General Order 156 to make a real difference in the market.  SDG&E once again proves that diversity brings real value to utility financial transactions and is good business for the utilities and for California.” 

        CPUC General Order 156 requires investor-owned utilities to submit annual plans for increasing the participation of businesses owned by women, minorities and disabled veterans in utility procurement.

        SDG&E is a regulated public utility that provides safe and reliable energy service to 3.4 million consumers through 1.4 million electric meters and more than 840,000 natural gas meters in San Diego and southern Orange counties.  The utility’s area spans 4,100 square miles.  SDG&E is committed to creating ways to help our customers save energy and money every day.  SDG&E is a subsidiary of Sempra Energy (NYSE: SRE), a Fortune 500 energy services holding company based in San Diego.