Company: SREA
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001032208-25-000012
Chunk: 199

Company: SEMPRA
Filing Date: 2025-02-25
Form: 10-K
Item: Item 1
Chunk 199
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/or prospects.

In addition to market and economic conditions, factors that can affect the availability and cost of capital include:

▪adverse changes to laws and regulations, including recent and proposed changes to energy market regulation in Mexico

2024 Form 10-K  |  44

▪for Sempra and SDG&E, risks related to California wildfires 

▪for Sempra, SDG&E and SoCalGas, any deterioration of or uncertainty in the political or regulatory environment for local natural gas distribution companies operating in California

▪credit ratings downgrades, such as S&P’s January 2025 actions that revised Sempra’s outlook to negative from stable and downgraded SoCalGas’ issuer credit rating to A- from A.

Credit rating agencies may downgrade our credit ratings or place them on negative outlook.

Credit rating agencies routinely evaluate Sempra, SDG&E, SoCalGas, SI Partners and certain of our other businesses whose ratings are based on several factors, including the factors described below and, generally, the ability to generate cash flows; terms and levels of indebtedness, including the credit rating agencies’ treatment of certain types of indebtedness, such as subordinated indebtedness which is given partial equity credit but carries a higher interest rate than comparable senior indebtedness; overall financial strength; specific transactions or events, such as share repurchases and significant litigation; the status of certain capital projects, including our LNG projects; and general economic and industry conditions. These credit ratings could be downgraded or subject to other negative rating actions at any time, such as S&P’s January 2025 actions that revised Sempra’s outlook to negative from stable and downgraded SoCalGas’ issuer credit rating to A- from A. We discuss these credit ratings in “Part II – Item 7. MD&A – Capital Resources and Liquidity.”

For Sempra, the Rating Agencies have noted that the following events, among others, could lead to negative ratings actions:

▪expansion of natural gas liquefaction projects or other unregulated businesses in a manner inconsistent with its present level of credit quality 

▪the PA LNG Phase 1 project experiences higher construction costs

▪Sempra’s consolidated financial measures consistently weaken, or it fails to meet certain financial credit metrics

▪catastrophic wildfires caused by SDG&E or by any California electric IOUs that participate in the Wildfire Fund, which could exhaust the fund earlier than expected

▪a ratings downgrade at SDG&E, SoCalGas, Oncor and