S&P affirms Sempra

Standard & Poor's said it affirmed its BBB+ corporate credit rating on Sempra Energy and its A corporate credit ratings for Sempra's wholly owned subsidiaries, San Diego Gas & Electric Co. and Southern California Gas Co.

The agency said that the affirmations follow Sempra's announcement that it will form a joint venture with the Royal Bank of Scotland Group (AA-/stable/A-1+) that will absorb the operations of Sempra Commodities.

Although Sempra's business risk will substantially improve because of the transaction, the joint venture's credit benefits will be almost entirely offset by Sempra's intention to complete a $1.5 billion to $2 billion leveraged share-repurchase program by 2009, S&P added.

The outlook remains stable.

The new joint venture, RBS Sempra Commodities, will positively alter Sempra's risk profile by removing the liquidity, capital and credit support requirements of Sempra's commodity trading business from the company's balance sheet, because RBS will fully guarantee all of these obligations after the transaction closes, according to S&P.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.