S&P cuts Sempra Energy unsecured rating

S&P said it lowered Sempra Energy’s unsecured debt rating to BBB from BBB+.

Sempra has been slowly funding more of its capital spending programs with debt issuances at its operating subsidiaries. Accordingly, the percentage of debt at the company's operating subsidiaries (priority debt) to total debt exceeds 50%. With the expected formation of Sempra Infrastructure Partners , S&P said it anticipates future midstream debt financing needs will be met at the operating company level, increasing its confidence that priority debt will consistently exceed 50%.

“Under our criteria, when the priority debt ratio exceeds 50%, we consider the issuer's unsecured debt to be subordinated, and we lower our unsecured debt rating one notch below the issuer credit rating,” the agency said in a press release.

The outlook remains negative.

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