Pricing Agreement
Exhibit 1.2
Pricing Agreement
Deutsche Bank Securities Inc.
60 Wall Street
New York, NY 10005
Calyon Securities (USA) Inc.
1301 Avenue of the Americas
New York, NY 10019
Wachovia Capital Markets, LLC
301 S. College Street
Charlotte, NC 28288
As Representatives of the several
Underwriters named in Schedule I hereto,
September 17, 2007
Ladies and Gentlemen:
San Diego Gas & Electric Company, a California corporation (the “Company”), proposes, subject to the terms and conditions stated herein and in the Underwriting Agreement, dated September 17, 2007 (the “Underwriting Agreement”) between the Company on the one hand and Deutsche Bank Securities Inc., Calyon Securities (USA) Inc. and Wachovia Capital Markets, LLC on the other hand, to issue and sell to the Underwriters named in Schedule I hereto (the “Underwriters”) the First Mortgage Bonds specified in Schedule II hereto (the “Designated Bonds”). Each of the provisions of the Underwriting Agreement is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein; and each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Pricing Agreement and the Applicable Time (as defined herein), except that each representation and warranty which refers to the Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a representation and warranty as of the date of the Underwriting Agreement in relation to the Prospectus (as therein defined), and also a representation and warranty as of the date of this Pricing Agreement and the Applicable Time in relation to the Prospectus as amended or supplemented relating to the Designated Bonds which are the subject of this Pricing Agreement. Each reference to the Representatives herein and in the provisions of the Underwriting Agreement so incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined. The Representatives designated to act on behalf of the Representatives and on behalf of each of the Underwriters of the Designated Bonds pursuant to Section 12 of the Underwriting Agreement and the address of the Representatives referred to in such Section 12 are set forth at the end of Schedule II hereto.
1
An amendment to the Registration Statement, or a supplement to the Prospectus, as the case may be, and a Final Term Sheet (as defined in the Underwriting Agreement) relating to the Designated Bonds, in the form attached hereto as Schedule III, is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the Underwriting Agreement incorporated herein by reference, the Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at the time and place and at the purchase price to the Underwriters set forth in Schedule II hereto, the principal amount of Designated Bonds set forth opposite the name of such Underwriter in Schedule I hereto.
(Signature Page Follows)
2
If the foregoing is in accordance with your understanding, please sign and return to us one for the Company and for each of the Representatives plus one for each counsel counterparts hereof, and upon acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof, including the provisions of the Underwriting Agreement incorporated herein by reference, shall constitute a binding agreement between each of the Underwriters, on the one hand, and the Company, on the other hand. It is understood that your acceptance of this letter on behalf of each of the Underwriters is or will be pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Company for examination upon request, but without warranty on the part of the Representatives as to the authority of the signers thereof.
| Very truly yours, | ||
| San Diego Gas & Electric Company | ||
| By: | /s/ ROBERT M. SCHLAX | |
| Name: Robert M. Schlax | ||
| Title: Vice President & Controller | ||
SIGNATURE PAGES TO PRICING AGREEMENT
| Accepted as of the date hereof: | ||
| Deutsche Bank Securities Inc. | ||
| By: | /s/ BEN SMILCHENSKY | |
| Name: Ben Smilchensky | ||
| Title: Managing Director | ||
| By: | /s/ RYAN MONTGOMERY | |
| Name: Ryan Montgomery | ||
| Title: Director | ||
| Calyon Securities (USA) Inc. | ||
| By: | /s/ RONALD S. KROLICK | |
| Name: Ronald S. Krolick | ||
| Title: Managing Director | ||
| Wachovia Capital Markets, LLC | ||
| By: | /s/ JAMES T. WILLIAMS JR. | |
| Name: James T. Williams Jr. | ||
| Title: Managing Director | ||
On behalf of each of the Underwriters
SIGNATURE PAGES TO PRICING AGREEMENT
SCHEDULE I
| Underwriter | Principal Amount of Designated Bonds to be Purchased | ||
| Deutsche Bank Securities Inc. | $ | 60,834,000 | |
| Calyon Securities (USA) Inc. | 60,833,000 | ||
| Wachovia Capital Markets, LLC | 60,833,000 | ||
| Merrill Lynch, Pierce, Fenner & Smith Incorporated | 23,750,000 | ||
| Morgan Stanley & Co. Incorporated | 23,750,000 | ||
| Blaylock & Company, Inc. | 5,000,000 | ||
| Guzman & Company | 5,000,000 | ||
| Loop Capital Markets, LLC | 5,000,000 | ||
| Utendahl Capital Partners, L.P. | 5,000,000 | ||
| Total | $ | 250,000,000 | |
Schedule I-1
SCHEDULE II
Title of Designated Bonds:
6.125% First Mortgage Bonds, Series FFF, due 2037
Aggregate principal amount:
$250,000,000
Price to Public:
99.688% of the principal amount of the Designated Bonds
Purchase Price by Underwriters:
98.813% of the principal amount of the Designated Bonds
Form of Designated Bonds:
Book-entry only form represented by one or more global securities deposited with The Depository Trust Company (“DTC”) or its designated custodian, to be made available for checking by the Representatives at least twenty-four hours prior to the Time of Delivery at the office of DTC.
Specified funds for payment of purchase price:
Federal (same day) funds
Applicable Time:
5:00 p.m. (New York City time) September 17, 2007
Time of Delivery:
10:00 a.m. (New York City time), September 20, 2007
Indenture:
Indenture dated July 1, 1940, as amended and supplemented to date, including the Supplemental Indenture dated as of September 20, 2007, between the Company and U.S. Bank National Association, as successor trustee
Maturity:
September 15, 2037
Schedule II-1
Interest Rate:
6.125%
Interest Payment Dates:
March 15 and September 15, commencing March 15, 2008
Redemption Provisions:
The Designated Bonds may be redeemed, in whole or in part, at the option of the Company, at any time or from time to time on the terms and subject to the conditions set forth in the final prospectus supplement dated September 17, 2007 relating to the Designated Bonds.
Sinking Fund Provisions:
No sinking fund provisions
Closing location for delivery of Designated Bonds:
Latham & Watkins LLP
633 West Fifth Street
Los Angeles, California 90071
Additional Closing Conditions:
Not applicable
Names and addresses of Representatives:
Designated Representatives:
Deutsche Bank Securities Inc.
Calyon Securities (USA) Inc.
Wachovia Capital Markets, LLC
Address for Notices, etc.:
Deutsche Bank Securities Inc.
60 Wall Street
New York, NY 10005
Attention: Legal Department
Fax: (212) ###-###-####
Calyon Securities (USA) Inc.
1301 Avenue of the Americas, 17th Floor
New York, NY 10019
Schedule II-2
Attention: David Travis
Fax: (917) ###-###-####
Wachovia Capital Markets, LLC
301 S. College Street
Charlotte, NC 28288
Attention: Transaction Management Group
Fax: (704) ###-###-####
Schedule II-3
SCHEDULE III
| Issuer Free Writing Prospectus September 17, 2007 Filed pursuant to Rule 433 Registration Statement No. 333-133541 |
Final Term Sheet
Issuer: San Diego Gas & Electric Company
Aggregate principal amount offered: $250,000,000
Ratings: A1/A+/AA (Moody’s/Standard & Poor’s/Fitch)
Coupon: 6.125%
Maturity: September 15, 2037
Yield to Maturity: 6.148%
Spread to Benchmark Treasury: +142 basis points
Benchmark Treasury: 4.75% due February 15, 2037
Benchmark Treasury Price and Yield: 100-11 and 4.728%
Interest Payment Dates: March 15 and September 15, beginning on March 15, 2008
Optional Redemption Provision: Make Whole Call UST + 25 basis points
Price to Public: 99.688%
Net proceeds to Issuer (after underwriting discount, but before expenses): $247,032,500
Format: SEC Registered
Transaction Date: September 17, 2007
Settlement Date: September 20, 2007
| Joint Book-Running Managers: | Deutsche Bank Securities Inc. Calyon Securities (USA) Inc. Wachovia Capital Markets, LLC |
Schedule III-1
| Co-Managers: | Merrill Lynch, Pierce, Fenner & Smith Incorporated Morgan Stanley & Co. Incorporated Blaylock & Company, Inc. Guzman & Company Loop Capital Markets, LLC Utendahl Capital Partners, L.P. |
Note: A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.
The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus and supplement thereto in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling Deutsche Bank Securities Inc. toll free at ###-###-#### or Calyon Securities (USA) Inc. collect at ###-###-#### or Wachovia Capital Markets, LLC toll free at ###-###-####.
Schedule III-2
