San Diego Gas & Electric: pleased with $500 million bond sale, fortunate for low interest rates

By Andrea Heisinger

New York, Aug. 24 - San Diego Gas & Electric Co. thought its $500 million sale of 30-year first mortgage bonds went well, as the company tapped the market to take advantage of low rates, a company spokesperson said on Tuesday.

The sale of 4.5% 30-year bonds priced on Monday at the tight end of price talk and with books that were about five times oversubscribed.

"I would say we were very pleased and fortunate we could take advantage of low rates for investors," spokesperson Stephanie Donovan told Prospect News.

The utility has a "pretty healthy appetite" for doing these kinds of bond deals for infrastructure investments, she said.

"We're in the business of expanding our infrastructure with new technology," Donovan said.

Among current projects are a $2 billion power line improvement and smart power meter upgrade. Due to these needs, it makes sense to borrow now, she said.

The company had a target of $800 million in debt sales for the year and already did a $250 million sale of 30-year bonds on May 10.

Proceeds from Monday's sale are partially going to a general treasury fund and being used for general working capital purposes. They will also be used to support the electric and natural gas procurement programs, to replenish amounts expended and to be expended for the expansion of a utility plant and to repay commercial paper bearing interest rates of less than 1%.

The utility subsidiary of Sempra Energy is based in San Diego.

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