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DEBT AND CREDIT FACILITIES | 12 Months Ended
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Dec. 31, 2018
Debt Disclosure [Abstract] |
Debt and Credit Facilities | DEBT AND CREDIT FACILITIES LINES OF CREDIT At December 31, 2018, Sempra Energy Consolidated had an aggregate of $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 which we describe below. Available unused credit on these lines at December 31, 2018 was approximately $4.2 billion. Our foreign operations have additional general purpose credit facilities aggregating $1.8 billion at December 31, 2018. Available unused credit on these lines totaled $0.8 billion at December 31, 2018.
PRIMARY U.S. COMMITTED LINES OF CREDIT
(Dollars in millions)
|  |  | At December 31, 2018
|  |  | Total facility |  | Commercial paper outstanding(1) |  | Adjustment for combined limit |  | Available unused credit
Sempra Energy(2) |  | $ | 1,250 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,250 |
Sempra Global(3) |  | 3,185 |  |  | (669 | ) |  | — |  |  | 2,516 |
California Utilities(4): |  |  |  |  |  |  |  |
| SDG&E |  | 750 |  |  | (291 | ) |  | (6 | ) |  | 453 |
| SoCalGas |  | 750 |  |  | (256 | ) |  | (41 | ) |  | 453 |
| Less: subject to a combined limit of $1 billion for both utilities |  | (500 | ) |  | — |  |  | 47 |  |  | (453 | )
|  |  | 1,000 |  |  | (547 | ) |  | — |  |  | 453 |
Total |  | $ | 5,435 |  |  | $ | (1,216 | ) |  | $ | — |  |  | $ | 4,219 |
(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 December 31, 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 December 31, 2018.
Related to the committed lines of credit in the table above:
▪ | Each is a 5-year syndicated revolving credit agreement expiring in October 2020.
▪ | Citibank N.A. serves as administrative agent for the Sempra Energy and Sempra Global facilities and JPMorgan Chase Bank, N.A. serves as administrative agent for the California Utilities combined facility.
▪ | Each facility has a syndicate of 21 lenders. No single lender has greater than a 7-percent share in any facility.
▪ | Sempra Energy, SDG&E and SoCalGas must maintain a ratio of indebtedness to total capitalization (as defined in each agreement) 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 December 31, 2018.
▪ | Borrowings bear interest at benchmark rates plus a margin that varies with Sempra Energy’s credit ratings in the case of the Sempra Energy and Sempra Global lines of credit, and with the borrowing utility’s credit rating in the case of the California Utilities line of credit.
▪ | The California Utilities’ obligations under their agreement are individual obligations, and a default by one utility would not constitute a default by the other utility or preclude borrowings by, or the issuance of letters of credit on behalf of, the other utility.
CREDIT FACILITIES IN SOUTH AMERICA AND MEXICO
(U.S. dollar equivalent in millions)
|  |  |  | At December 31, 2018
|  | Denominated in |  | Total facility |  | Amount outstanding |  | Available unused credit
Sempra South American Utilities(1): |  |  |  |  |  |  |
| Peru(2) | Peruvian sol |  | $ | 534 |  |  | $ | (182 | ) | (3) | $ | 352 |
| Chile | Chilean peso |  | 115 |  |  | — |  |  | 115 |
Sempra Mexico: |  |  |  |  |  |  |
| IEnova(4) | U.S. dollar |  | 1,170 |  |  | (808 | ) |  | 362 |
Total |  |  | $ | 1,819 |  |  | $ | (990 | ) |  | $ | 829 |
1) | The credit facilities were entered into to finance working capital and for general corporate purposes and expire between 2019 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 December 31, 2018.
3) | Includes bank guarantees of $18 million.
4) | In February 2019, IEnova revised the terms of its five-year revolving credit facility by increasing the amount available under the facility from $1.17 billion to $1.5 billion, extending the expiration of the facility from August 2020 to February 2024 and increasing the syndicate of lenders from eight to 10.
Outside of these 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 December 31, 2018, we had approximately $598 million in standby letters of credit outstanding under these agreements. WEIGHTED-AVERAGE INTEREST RATES The weighted-average interest rates on the total short-term debt at Sempra Energy Consolidated were 3.01 percent and 1.92 percent at December 31, 2018 and 2017, respectively. The weighted-average interest rates on total short-term debt at SDG&E were 2.97 percent and 1.65 percent at December 31, 2018 and 2017, respectively. The weighted-average interest rates on total short-term debt at SoCalGas were 2.58 percent and 1.64 percent at December 31, 2018 and 2017, respectively. LONG-TERM DEBT The following tables show the detail and maturities of long-term debt outstanding:
LONG-TERM DEBT
(Dollars in millions)
| December 31,
| 2018 |  | 2017
SDG&E |  |  |
First mortgage bonds (collateralized by plant assets): |  |  |
1.65% July 1, 2018(1) | $ | — |  |  | $ | 161 |
3% August 15, 2021 | 350 |  |  | 350 |
1.914% payable 2015 through February 2022 | 125 |  |  | 161 |
3.6% September 1, 2023 | 450 |  |  | 450 |
2.5% May 15, 2026 | 500 |  |  | 500 |
6% June 1, 2026 | 250 |  |  | 250 |
5.875% January and February 2034(1) | 176 |  |  | 176 |
5.35% May 15, 2035 | 250 |  |  | 250 |
6.125% September 15, 2037 | 250 |  |  | 250 |
4% May 1, 2039(1) | 75 |  |  | 75 |
6% June 1, 2039 | 300 |  |  | 300 |
5.35% May 15, 2040 | 250 |  |  | 250 |
4.5% August 15, 2040 | 500 |  |  | 500 |
3.95% November 15, 2041 | 250 |  |  | 250 |
4.3% April 1, 2042 | 250 |  |  | 250 |
3.75% June 1, 2047 | 400 |  |  | 400 |
4.15% May 15, 2048 | 400 |  |  | — |
| 4,776 |  |  | 4,573 |
Other long-term debt: |  |  |  |  |
OMEC LLC variable-rate loan (5.2925% after floating-to-fixed rate swaps effective 2007), |  |  |  |
payable 2013 through April 2019 (collateralized by OMEC plant assets) | — |  |  | 295 |
OMEC LLC variable-rate loan (4.7896% at December 31, 2018 except for $142 at 5.2925% |  |  |
after floating-to-fixed rate swaps through April 1, 2019), payable 2019 through 2024 |  |  |
(collateralized by OMEC plant assets) | 220 |  |  | — |
Capital lease obligations: |  |  |  |  |
Purchased-power contracts | 1,270 |  |  | 731 |
Other | 2 |  |  | 1 |
| 1,492 |  |  | 1,027 |
| 6,268 |  |  | 5,600 |
Current portion of long-term debt | (81 | ) |  | (220 | )
Unamortized discount on long-term debt | (12 | ) |  | (11 | )
Unamortized debt issuance costs | (37 | ) |  | (34 | )
Total SDG&E | 6,138 |  |  | 5,335 |
SoCalGas |  |  |  |  |
First mortgage bonds (collateralized by plant assets): |  |  |  |  |
5.45% April 15, 2018 | — |  |  | 250 |
1.55% June 15, 2018 | — |  |  | 250 |
3.15% September 15, 2024 | 500 |  |  | 500 |
3.2% June 15, 2025 | 350 |  |  | 350 |
2.6% June 15, 2026 | 500 |  |  | 500 |
5.75% November 15, 2035 | 250 |  |  | 250 |
5.125% November 15, 2040 | 300 |  |  | 300 |
3.75% September 15, 2042 | 350 |  |  | 350 |
4.45% March 15, 2044 | 250 |  |  | 250 |
4.125% June 1, 2048 | 400 |  |  | — |
4.3% January 15, 2049 | 550 |  |  | — |
| 3,450 |  |  | 3,000 |
Other long-term debt (uncollateralized): |  |  |  |  |
1.875% Notes payable 2016 through May 2026(1) | 4 |  |  | 4 |
5.67% Notes January 18, 2028 | 5 |  |  | 5 |
Capital lease obligations | 3 |  |  | 1 |
| 12 |  |  | 10 |
| 3,462 |  |  | 3,010 |
Current portion of long-term debt | (3 | ) |  | (501 | )
Unamortized discount on long-term debt | (6 | ) |  | (7 | )
Unamortized debt issuance costs | (26 | ) |  | (17 | )
Total SoCalGas | 3,427 |  |  | 2,485 |
LONG-TERM DEBT (CONTINUED)
(Dollars in millions)
| December 31,
| 2018 |  | 2017
Sempra Energy |  |  |
Other long-term debt (uncollateralized): |  |  |
6.15% Notes June 15, 2018 | — |  |  | 500 |
9.8% Notes February 15, 2019 | 500 |  |  | 500 |
Notes at variable rates (2.69% at December 31, 2018) July 15, 2019 | 500 |  |  | — |
1.625% Notes October 7, 2019 | 500 |  |  | 500 |
2.4% Notes February 1, 2020 | 500 |  |  | — |
2.4% Notes March 15, 2020 | 500 |  |  | 500 |
2.85% Notes November 15, 2020 | 400 |  |  | 400 |
Notes at variable rates (2.94% at December 31, 2018) January 15, 2021(1) | 700 |  |  | — |
Notes at variable rates (3.24% at December 31, 2018) March 15, 2021 | 850 |  |  | 850 |
2.875% Notes October 1, 2022 | 500 |  |  | 500 |
2.9% Notes February 1, 2023 | 500 |  |  | — |
4.05% Notes December 1, 2023 | 500 |  |  | 500 |
3.55% Notes June 15, 2024 | 500 |  |  | 500 |
3.75% Notes November 15, 2025 | 350 |  |  | 350 |
3.25% Notes June 15, 2027 | 750 |  |  | 750 |
3.4% Notes February 1, 2028 | 1,000 |  |  | — |
3.8% Notes February 1, 2038 | 1,000 |  |  | — |
6% Notes October 15, 2039 | 750 |  |  | 750 |
4% Notes February 1, 2048 | 800 |  |  | — |
Fair value adjustments for interest rate swaps, net | — |  |  | (1 | )
Build-to-suit lease(2) | 138 |  |  | 138 |
Sempra South American Utilities |  |  |  |
Other long-term debt (uncollateralized): |  |  |  |  |
Chilquinta Energía – 4.25% Series B Bonds October 30, 2030 | 186 |  |  | 205 |
Luz del Sur |  |  |  |  |
Bank loans 4.3% to 5.7% payable 2017 through December 2021 | 105 |  |  | 53 |
Corporate bonds at 4.75% to 8.75% payable 2014 through September 2029 | 432 |  |  | 415 |
Other bonds at 3.77% to 4.61% payable 2020 through May 2022 | 4 |  |  | 6 |
Capital lease obligations | 6 |  |  | 6 |
Sempra Mexico |  |  |  |  |
Other long-term debt (uncollateralized unless otherwise noted): |  |  |  |  |
Notes February 8, 2018 at variable rates (2.66% after floating-to-fixed rate cross-currency |  |  |  |  |
swaps effective 2013) | — |  |  | 66 |
6.3% Notes February 2, 2023 (4.12% after cross-currency swap) | 198 |  |  | 198 |
Notes at variable rates (4.88% after floating-to-fixed rate swaps effective 2014), |  |  |  |  |
payable 2016 through December 2026, collateralized by plant assets | 275 |  |  | 314 |
3.75% Notes January 14, 2028 | 300 |  |  | 300 |
Bank loans including $246 at a weighted-average fixed rate of 6.67%, $164 at variable rates |  |  |
(weighted-average rate of 6.33% after floating-to-fixed rate swaps effective 2014) and $37 at variable |  |  |
rates (5.82% at December 31, 2018), payable 2016 through March 2032, collateralized by plant assets | 447 |  |  | 468 |
4.875% Notes January 14, 2048 | 540 |  |  | 540 |
Loan at variables rates (6.07% at December 31, 2018) July 31, 2028 | 4 |  |  | — |
Sempra Renewables |  |  |  |  |
Other long-term debt (collateralized by project assets): |  |  |  |  |
Loan at variable rates (3.325% at December 31, 2017) payable 2012 through December 2028 |  |  |  |  |
except for $59 at 3.668% after floating-to-fixed rate swaps effective June 2012(1) | — |  |  | 77 |
Sempra LNG & Midstream |  |  |  |  |
Other long-term debt (uncollateralized): |  |  |  |  |
Notes at 2.87% to 3.51% October 1, 2026(1) | 21 |  |  | 20 |
| 13,756 |  |  | 9,405 |
Current portion of long-term debt | (1,589 | ) |  | (706 | )
Unamortized discount on long-term debt | (38 | ) |  | (13 | )
Unamortized premium on long-term debt | 4 |  |  | 4 |
Unamortized debt issuance costs | (87 | ) |  | (65 | )
Total other Sempra Energy | 12,046 |  |  | 8,625 |
Total Sempra Energy Consolidated | $ | 21,611 |  |  | $ | 16,445 |
(1) | Callable long-term debt not subject to make-whole provisions.
(2) | We discuss this lease in Notes 2 and 16.
MATURITIES OF LONG-TERM DEBT(1)
(Dollars in millions)
| SDG&E |  | SoCalGas |  | Other Sempra Energy |  | Total Sempra Energy Consolidated
2019 | $ | 64 |  |  | $ | — |  |  | $ | 1,590 |  |  | $ | 1,654 |
2020 | 71 |  |  | — |  |  | 1,548 |  |  | 1,619 |
2021 | 425 |  |  | — |  |  | 1,700 |  |  | 2,125 |
2022 | 62 |  |  | — |  |  | 620 |  |  | 682 |
2023 | 500 |  |  | — |  |  | 1,321 |  |  | 1,821 |
Thereafter | 3,874 |  |  | 3,459 |  |  | 6,833 |  |  | 14,166 |
Total | $ | 4,996 |  |  | $ | 3,459 |  |  | $ | 13,612 |  |  | $ | 22,067 |
(1) | Excludes capital lease obligations, build-to-suit lease, fair value adjustments for interest rate swaps, discounts, premiums and debt issuance costs.
Various long-term obligations totaling $12.9 billion at Sempra Energy Consolidated at December 31, 2018 are unsecured. This includes unsecured long-term obligations totaling $9 million at SoCalGas. There were no unsecured long-term obligations at SDG&E. CALLABLE LONG-TERM DEBT At the option of Sempra Energy, SDG&E and SoCalGas, certain debt at December 31, 2018 is callable subject to premiums:
CALLABLE LONG-TERM DEBT
(Dollars in millions)
| SDG&E |  | SoCalGas |  | Other Sempra Energy |  | Total Sempra Energy Consolidated
Not subject to make-whole provisions | $ | 251 |  |  | $ | 4 |  |  | $ | 721 |  |  | $ | 976 |
Subject to make-whole provisions | 4,525 |  |  | 3,455 |  |  | 10,274 |  |  | 18,254 |
In addition, the OMEC LLC loan that we discuss below, with $220 million of outstanding borrowings at December 31, 2018, may be prepaid at OMEC LLC’s option. FIRST MORTGAGE BOND S The California Utilities issue first mortgage bonds secured by a lien on utility plant assets. The California Utilities may issue additional first mortgage bonds if in compliance with the provisions of their bond agreements (indentures). These indentures require, among other things, the satisfaction of pro forma earnings-coverage tests on first mortgage bond interest and the availability of sufficient mortgaged property to support the additional bonds, after giving effect to prior bond redemptions. The most restrictive of these tests (the property test) would permit the issuance, subject to CPUC authorization, of additional first mortgage bonds of $5.7 billion at SDG&E and $1.2 billion at SoCalGas at December 31, 2018. SDG&E In May 2018, SDG&E publicly offered and sold $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 In May 2018, SoCalGas publicly offered and sold $400 million of 4.125-percent, first mortgage bonds maturing in 2048. In September 2018, SoCalGas publicly offered and sold $550 million of 4.30-percent, first mortgage bonds maturing in 2049. SoCalGas used the proceeds from the offerings to repay outstanding commercial paper and for other general corporate purposes. OTHER 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
Notes at variable rates(1) due 2019 | $ | 500 |  |  | July 15, 2019 |  | Quarterly
Notes at variable rates(2) due 2021 | 700 |  |  | January 15, 2021 |  | Quarterly
2.4% Notes due 2020 | 500 |  |  | February 1, 2020 |  | Semi-annually
2.9% Notes due 2023 | 500 |  |  | February 1, 2023 |  | Semi-annually
3.4% Notes due 2028 | 1,000 |  |  | February 1, 2028 |  | Semi-annually
3.8% Notes due 2038 | 1,000 |  |  | February 1, 2038 |  | Semi-annually
4% 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 variable-rate notes due 2019 are not subject to redemption at our option. At our option, we may redeem some or all of the variable-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. 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. 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. SDG&E In December 2018, OMEC LLC entered into a loan agreement for $220 million, the proceeds of which were used to repay its project financing loan used for the construction of OMEC that was scheduled to mature in April 2019. The loan matures in August 2024, unless OMEC LLC exercises its put option in which case the loan will mature in November 2019. We describe the put option in Note 1. The loan bears interest at a rate per annum equal to the 3-month LIBOR rate plus 200 bps. OMEC LLC previously entered into a floating-to-fixed interest rate swap for $142 million of the project financing loan that matures on April 30, 2019, which results in a fixed rate of 5.2925 percent. In December 2018, OMEC LLC entered into new floating-to-fixed interest rate swaps to hedge future interest payments on the loan with notional amounts of $159 million that will become effective on April 30, 2019 and mature on October 31, 2019, resulting in a fixed rate of 2.765 percent, and $142 million of swaptions that, if exercised, will become effective on October 31, 2019 and mature on October 31, 2023, resulting in a fixed rate of 3.0375 percent. We provide additional information concerning the interest rate swaps in Note 11. The loan is with third party lenders and is collateralized by OMEC’s assets. SDG&E is not a party to the loan agreement and does not have any additional implicit or explicit financial responsibility to OMEC LLC, nor would SDG&E be required to assume OMEC LLC’s loan under the put option purchase scenario. In 2017, SDG&E satisfied all of the conditions precedent for a CPUC-approved 20-year PPA with a 500-MW power plant facility. Construction of the facility was completed and delivery of contracted power commenced in December 2018, at which time we recorded a $550 million capital lease obligation on SDG&E’s and Sempra Energy’s Consolidated Balance Sheets. Sempra South American Utilities Luz del Sur drew bank loans in 2018 totaling $107 million, of which $61 million is included in the amounts outstanding under Peruvian credit facilities in the “Credit Facilities in South America and Mexico” table above, at interest rates ranging from 4.3 percent to 5.7 percent and maturity dates ranging from September 2020 through December 2021. In October 2018, Luz del Sur publicly offered and sold $50 million of corporate bonds at 7 percent, which mature in October 2028. Sempra Renewables As we discuss in Note 5, in December 2018, Sempra Renewables completed the sale of all its operating solar assets and certain other assets. Sempra Renewables received $1.6 billion in cash proceeds and the buyer assumed debt of $70 million, net of unamortized debt issuance costs. INTEREST RATE SWAPS We discuss our fair value and cash flow hedging interest rate swaps in Note 11.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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