Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant.
Five Year, $1.2 Billion Revolving Credit Facility
On October 14, 2022, Southern California Gas Company, a regulated public utility
and an indirect subsidiary of Sempra Energy, entered into a Five Year Credit
Agreement with a syndicate of 23 lenders for which JPMorgan Chase Bank, N.A.
serves as administrative agent. No single lender has a commitment exceeding 6%
of the credit facility amount.
The credit facility permits revolving credit borrowings by Southern California
Gas Company of up to $1.2 billion through October 14, 2027. It also provides for
the issuance of up to $150 million (which amount may be increased to up to $250
million subject to obtaining commitments from lenders) of letters of credit on
behalf of Southern California Gas Company with the amount of borrowings
otherwise available under the credit facility reduced by the amount of
outstanding letters of credit.
Subject to obtaining commitments from existing or new lenders and satisfaction
of other specified conditions, Southern California Gas Company has the right to
increase, in one or more requests, the aggregate amount of the commitments by
$300 million.
Borrowings under the credit facility, none of which are outstanding, would bear
interest at benchmark rates plus a margin that varies with Southern California
Gas Company's credit rating. The credit facility also requires Southern
California Gas Company to maintain at the end of each quarter a ratio of total
indebtedness to total capitalization (each as defined in the credit facility) of
no more than 65%.
The credit facility contains customary representations and warranties, covenants
and events of default. In the case of an event of default, including cross
defaults relating to certain other indebtedness of Southern California Gas
Company and certain of its material subsidiaries (if any such subsidiaries then
exist) in excess of $250 million, the lenders may terminate the credit facility
and declare the amounts outstanding (including accrued interest and unpaid fees)
payable immediately. For events of default relating to insolvency or bankruptcy
of Southern California Gas Company and certain of its material subsidiaries (if
any such subsidiaries then exist), the commitments are automatically terminated
and the amounts outstanding become payable immediately.
In connection with the effectiveness of the credit facility on October 14, 2022,
Southern California Gas Company terminated its $750 million Five Year Credit
Agreement that was scheduled to expire in 2024.
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