DEBT AND CREDIT FACILITIES

LINES OF CREDIT

At December 31, 2017, Sempra Energy Consolidated had an aggregate of $4.3 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, 2017 was approximately $3.0 billion. Our foreign operations have additional general purpose credit facilities aggregating $1.8 billion at December 31, 2017. Available unused credit on these lines totaled $1.4 billion at December 31, 2017.



PRIMARY U.S. COMMITTED LINES OF CREDIT
(Dollars in millions)
		At December 31, 2017
		Total facility			Commercial paper outstanding⁽¹⁾			Available unused credit
Sempra Energy⁽²⁾		$	1,000		$	—		$	1,000
Sempra Global⁽³⁾		2,335			(931		)	1,404
California Utilities⁽⁴⁾:
	SDG&E	750			(253		)	497
	SoCalGas	750			(116		)	634
	Less: subject to a combined limit of $1 billion for both utilities	(500		)	—			(500		)
		1,000			(369		)	631
Total		$	4,335		$	(1,300	)	$	3,035


⁽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, 2017.


⁽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, 2017.

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, 2017.


▪	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.

On January 17, 2018, pursuant to the terms of the Sempra Energy and Sempra Global credit facilities, the amounts available under the lines of credit were increased by $250 million, from $1.0 billion to $1.25 billion, for Sempra Energy and by $850 million, from $2.335 billion to $3.185 billion, for Sempra Global. This additional borrowing capacity is available to us for working capital, capital expenditures and other general corporate purposes, and is intended to provide us with additional liquidity and to support commercial paper that we may utilize from time to time to fund our strategic and growth initiatives.



CREDIT FACILITIES IN SOUTH AMERICA AND MEXICO
(U.S. dollar equivalent in millions)
			At December 31, 2017
		Denominated in	Total facility		Amount outstanding				Available unused credit
Sempra South American Utilities⁽¹⁾:
	Peru⁽²⁾	Peruvian sol	$	465	$	(169	)	⁽³⁾	$	296
	Chile	Chilean peso	115		—				115
Sempra Mexico:
	IEnova⁽⁴⁾	U.S. dollar	1,170		(137		)		1,033
Total			$	1,750	$	(306	)		$	1,444

⁽¹⁾ The credit facilities were entered into to finance working capital and for general corporate purposes and expire between 2018 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, 2017.

⁽³⁾ Includes bank guarantees of $18 million.

⁽⁴⁾ Five-year revolver expiring in August 2020 with a syndicate of eight lenders.

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, 2017, we had approximately $629 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 1.92 percent and 1.51 percent at December 31, 2017 and 2016, respectively. The weighted-average interest rate on total short-term debt at SDG&E was 1.65 percent at December 31, 2017. The weighted-average interest rates on total short-term debt at SoCalGas were 1.64 percent and 0.75 percent at December 31, 2017 and 2016, respectively.

BRIDGE FACILITY RELATED TO THE PENDING ACQUISITION OF ENERGY FUTURE HOLDINGS CORP.

At December 31, 2017, Sempra Energy had a commitment letter from a syndicate of banks, subject to customary conditions, for a $4.0 billion, 364-day senior unsecured bridge facility to backstop a portion of our obligations to pay the Merger Consideration for the acquisition of EFH, which we discuss in Note 3. The $4.0 billion commitment is reduced by the amount of funds received through Sempra Energy’s sales of equity securities and debt securities, subject in each case to certain exceptions, and increases in our borrowing capacity under our existing revolving credit facilities. At December 31, 2017, we had no amounts outstanding under this bridge facility. Following the completion of the common stock offering and the mandatory convertible preferred stock offering, which closed on January 9, 2018, the facility was terminated. We discuss the offerings in Note 18.

LONG-TERM DEBT

The following tables show the detail and maturities of long-term debt outstanding:



LONG-TERM DEBT
(Dollars in millions)
	December 31,
	2017			2016
SDG&E
First mortgage bonds (collateralized by plant assets):
Bonds at variable rates (1.151% at December 31, 2016) March 9, 2017	$	—		$	140
1.65% July 1, 2018⁽¹⁾	161			161
3% August 15, 2021	350			350
1.914% payable 2015 through February 2022	161			197
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			—
	4,573			4,349
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			305
Capital lease obligations:
Purchased-power contracts	731			239
Other	1			1
	1,027			545
	5,600			4,894
Current portion of long-term debt	(220		)	(191		)
Unamortized discount on long-term debt	(11		)	(11		)
Unamortized debt issuance costs	(34		)	(34		)
Total SDG&E	5,335			4,658

SoCalGas
First mortgage bonds (collateralized by plant assets):
5.45% April 15, 2018	250			250
1.55% June 15, 2018	250			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
	3,000			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	1			—
	10			9
	3,010			3,009
Current portion of long-term debt	(501		)	—
Unamortized discount on long-term debt	(7		)	(7		)
Unamortized debt issuance costs	(17		)	(20		)
Total SoCalGas	2,485			2,982



LONG-TERM DEBT (CONTINUED)
(Dollars in millions)
	December 31,
	2017			2016
Sempra Energy
Other long-term debt (uncollateralized):
2.3% Notes April 1, 2017	$	—		$	600
6.15% Notes June 15, 2018	500			500
9.8% Notes February 15, 2019	500			500
1.625% Notes October 7, 2019	500			500
2.4% Notes March 15, 2020	500			500
2.85% Notes November 15, 2020	400			400
Notes at variable rates (2.038% at December 31, 2017) March 15, 2021	850			—
2.875% Notes October 1, 2022	500			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			—
6% Notes October 15, 2039	750			750
Fair value adjustments for interest rate swaps, net	(1		)	(3		)
Build-to-suit lease⁽²⁾	138			137
Sempra South American Utilities
Other long-term debt (uncollateralized):
Chilquinta Energía – 4.25% Series B Bonds October 30, 2030	205			185
Luz del Sur
Bank loans 5.18% to 6.7% payable 2016 through December 2018	53			75
Corporate bonds at 4.75% to 8.75% payable 2014 through September 2029	415			346
Other bonds at 3.77% to 4.61% payable 2020 through May 2022	6			7
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			63
6.3% Notes February 2, 2023 (4.12% after cross-currency swap)	198			189
Notes at variable rates (4.63% after floating-to-fixed rate swaps effective 2014),
payable 2016 through December 2026, collateralized by plant assets	314			352
3.75% Notes January 14, 2028	300			—
Bank loans including $251 at a weighted-average fixed rate of 6.67%, $178 at variable rates
(weighted-average rate of 6.29% after floating-to-fixed rate swaps effective 2014) and $39 at variable
rates (4.62% at December 31, 2017), payable 2016 through March 2032, collateralized by plant assets	468			481
4.875% Notes January 14, 2048	540			—
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			84
Sempra LNG & Midstream
Other long-term debt (uncollateralized unless otherwise noted):
Notes at 2.87% to 3.51% October 1, 2026⁽¹⁾	20			20
8.45% Notes payable 2012 through December 2017, collateralized by parent guarantee	—			6
	9,405			7,548
Current portion of long-term debt	(706		)	(722		)
Unamortized discount on long-term debt	(13		)	(10		)
Unamortized premium on long-term debt	4			4
Unamortized debt issuance costs	(65		)	(31		)
Total other Sempra Energy	8,625			6,789
Total Sempra Energy Consolidated	$	16,445		$	14,429


⁽¹⁾	Callable long-term debt not subject to make-whole provisions.


⁽²⁾	We discuss this lease in Note 15.



MATURITIES OF LONG-TERM DEBT⁽¹⁾
(Dollars in millions)
	SDG&E		SoCalGas		Other Sempra Energy		Total Sempra Energy Consolidated
2018	$	207	$	500	$	705	$	1,412
2019	321		—		1,098		1,419
2020	36		—		997		1,033
2021	385		—		961		1,346
2022	18		—		629		647
Thereafter	3,901		2,509		4,872		11,282
Total	$	4,868	$	3,009	$	9,262	$	17,139


⁽¹⁾	Excludes capital lease obligations, build-to-suit lease, market value adjustments for interest rate swaps, discounts, premiums and debt issuance costs.

Various long-term obligations totaling $8.4 billion at Sempra Energy Consolidated at December 31, 2017 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, 2017 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	$	412	$	4	$	97	$	513
Subject to make-whole provisions	4,161		3,005		7,058		14,224

In addition, the OMEC LLC project financing loan discussed in Note 1, with $295 million of outstanding borrowings at December 31, 2017, may be prepaid at OMEC LLC’s option.

FIRST MORTGAGE BONDS

The California Utilities issue first mortgage bonds secured by a lien on utility plant. 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 $4.7 billion at SDG&E and $1.1 billion at SoCalGas at December 31, 2017.

In June 2017, SDG&E publicly offered and sold $400 million of 3.75-percent, first mortgage bonds maturing in June 2047. SDG&E used the proceeds from the offering to repay outstanding commercial paper.

OTHER LONG-TERM DEBT

Sempra Energy

In January 2018, Sempra Energy publicly offered and sold an aggregate principal amount of $5.0 billion of fixed and floating rate notes, which we discuss in Note 18.

In October 2017, Sempra Energy publicly offered and sold $850 million of floating rate notes, maturing in March 2021. The floating rate notes bear interest at a rate equal to the three-month LIBOR plus 45 bps. The interest rate is reset quarterly. Sempra Energy used a substantial portion of the net proceeds from the offering to repay outstanding commercial paper, with remaining proceeds used for general corporate purposes.

In June 2017, Sempra Energy publicly offered and sold $750 million of 3.25-percent, fixed rate notes maturing in June 2027. Sempra Energy used the proceeds from the offering to repay outstanding commercial paper.

SDG&E

In 2015, SDG&E entered into a CPUC-approved 25-year PPA with a peaker plant facility. Construction of the peaker plant facility was completed and delivery of contracted power commenced in June 2017, at which time we recorded a $500 million capital lease obligation on SDG&E’s and Sempra Energy’s Consolidated Balance Sheets.

Sempra South American Utilities

Luz del Sur has outstanding corporate bonds and bank loans that are denominated in the local currency. In February 2017, Luz del Sur publicly offered and sold $50 million of corporate bonds at 6.375 percent, maturing in February 2023. In December 2017, Luz del Sur publicly offered and sold $50 million of corporate bonds at 5.9375 percent, maturing in December 2027.

Sempra Mexico

In December 2017, Sempra Mexico offered and sold in a private placement $300 million of 3.75-percent, fixed rate notes maturing in January 2028 and $540 million of 4.875-percent, fixed rate notes maturing in January 2048. Sempra Mexico used a substantial portion of the net proceeds from the offering to repay outstanding short-term debt, with remaining proceeds used for general corporate purposes.

INTEREST RATE SWAPS

We discuss our fair value and cash flow hedging interest rate swaps in Note 9.