EXHIBIT 1.2
Pricing Agreement
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Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Morgan Stanley & Co. Incorporated
Salomon Smith Barney Inc.
Charles Schwab & Co., Inc.
PaineWebber Incorporated
Prudential Securities Incorporated
On behalf of each of the Underwriters
c/o Goldman, Sachs & Co.,
85 Broad Street
New York, New York 10004
February 16, 2000
Ladies and Gentlemen:
Sempra Energy Capital Trust I, a statutory business trust created under the
Business Trust Act of the State of Delaware (Chapter 38, Title 12, of the
Delaware Code, 12 Del. C. ((S)) 3801 et seq.) (the "Designated Trust"), and
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Sempra Energy, a California corporation (the "Company"), as sponsor of the
Designated Trust and as guarantor, propose, subject to the terms and conditions
stated herein and in the Underwriting Agreement, dated February 16, 2000 (the
"Underwriting Agreement") between the Designated Trust and the Company on the
one hand and Goldman, Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated, Salomon Smith Barney Inc.,
Charles Schwab & Co., Inc., PaineWebber Incorporated and Prudential Securities
Incorporated on the other hand, to issue and sell to the Underwriters named in
Schedule I hereto (the "Underwriters") the Securities specified in Schedule II
hereto (the "Designated Securities"). The principal asset of the Designated
Trust consists of debt securities of the Company ("Subordinated Debentures"), as
specified in Schedule II to this Agreement. The Designated Securities will be
guaranteed by the Company to the extent set forth in the Designated Guarantee
with respect to such Designated Securities (the "Guarantee"). 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, 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 in relation to the Prospectus as amended or supplemented relating to
the Designated Securities 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
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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
Securities 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.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you 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 Designated Trust
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Designated
Trust, at the time and place and at the purchase price to the Underwriters set
forth in Schedule II hereto, the number of Designated Securities set forth
opposite the name of such Underwriter in Schedule I hereto.
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If the foregoing is in accordance with your understanding, please sign and
return to us one for the Designated Trust, 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 Designated Trust 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 Designated Trust and 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,
Sempra Energy
By: /s/ Charles A. McMonagle
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Name: Charles A. McMonagle
Title: Vice President and Treasurer
Sempra Energy Capital Trust I
By: /s/ Charles A. McMonagle
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Name: Charles A. McMonagle
Title: Regular Trustee
Accepted as of the date hereof:
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Morgan Stanley & Co. Incorporated
Salomon Smith Barney Inc.
Charles Schwab & Co., Inc.
PaineWebber Incorporated
Prudential Securities Incorporated
By: /s/ Goldman Sachs & Co.
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(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
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SCHEDULE I
Number of Designated
Underwriter Securities to be Purchased
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Goldman, Sachs & Co................................... 890,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated.... 885,000
Morgan Stanley & Co. Incorporated..................... 885,000
Salomon Smith Barney Inc.............................. 885,000
Charles Schwab & Co., Inc............................. 885,000
PaineWebber Incorporated.............................. 885,000
Prudential Securities Incorporated.................... 885,000
Banc of America Securities LLC........................ 80,000
Bear, Stearns & Co. Inc............................... 80,000
CIBC World Markets Corp............................... 80,000
Dain Rauscher Incorporated............................ 80,000
Deutsche Bank Securities Inc.......................... 80,000
Donaldson, Lufkin & Jenrette Securities Corporation... 80,000
A.G. Edwards & Sons, Inc.............................. 80,000
First Union Securities, Inc........................... 80,000
Lehman Brothers Inc................................... 80,000
Sutro & Co. Incorporated.............................. 80,000
Wachovia Securities, Inc.............................. 80,000
Advest, Inc........................................... 40,000
Robert W. Baird & Co. Incorporated.................... 40,000
J.C. Bradford & Co.................................... 40,000
Crowell, Weedon & Co.................................. 40,000
Fahnestock & Co. Inc.................................. 40,000
Fifth Third Securities, Inc........................... 40,000
First Security Van Kasper............................. 40,000
Gruntal & Co., L.L.C.................................. 40,000
J.J.B. Hilliard, W.L. Lyons, Inc...................... 40,000
Janney Montgomery Scott LLC........................... 40,000
Legg Mason Wood Walker, Incorporated.................. 40,000
McDonald Investments Inc., a KeyCorp Company.......... 40,000
McGinn, Smith & Co., Inc.............................. 40,000
Morgan Keegan & Company, Inc.......................... 40,000
Olde Discount Corporation............................. 40,000
Raymond James & Associates, Inc....................... 40,000
Redwood Securities Group, Inc......................... 40,000
The Robinson-Humphrey Company, LLC.................... 40,000
Muriel Siebert & Co., Inc............................. 40,000
TD Securities (USA) Inc............................... 40,000
Tucker Anthony Incorporated........................... 40,000
U.S. Bancorp Piper Jaffray Inc........................ 40,000
Wedbush Morgan Securities Inc......................... 40,000
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Total............................................ 8,000,000
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SCHEDULE II
Designated Trust:
Sempra Energy Capital Trust I
Title of Designated Securities:
8.90% Cumulative Quarterly Income Preferred Securities, Series A (QUIPSSM)
Aggregate liquidation amount:
Designated Securities: $200,000,000
Price to public:
$25.00 per Designated Security or 100% of the liquidation amount of the
Designated Securities
Purchase price to Underwriters:
$25.00 per Designated Security or 100% of the liquidation amount of the
Designated Securities
Underwriters' compensation:
As compensation to the Underwriters for their commitments hereunder, and in
view of the fact that the proceeds of the sale of the Designated Securities
will be used by the Designated Trust to purchase the Subordinated
Debentures of the Company, the Company hereby agrees to pay at the Time of
Delivery to the Representatives, for the accounts of the several
Underwriters, an amount equal to $0.7875 per Designated Security for the
Designated Securities to be delivered at each Time of Delivery.
Specified funds for payment of purchase price:
Federal (same day) funds
Time of Delivery:
10:00 a.m. (New York City time), February 23, 2000
Trust Agreement:
Amended and Restated Declaration of Trust dated as of February 23, 2000
among the Company, as Sponsor, The Bank of New York, as Property Trustee,
The Bank of New York (Delaware), as Delaware Trustee, the Regular Trustees
named therein and the several Holders of Trust Securities
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Designated Guarantee:
Preferred Securities Guarantee Agreement dated as of February 23, 2000
between the Company and The Bank of New York, as Guarantee Trustee
Designated Subordinated Debentures:
$206,185,567 aggregate principal amount of 8.90% Subordinated Deferrable
Interest Debentures, Series A, due February 23, 2030
Maturity:
February 23, 2030 (subject to (i) extension to a date not later than
February 23, 2049 and (ii) shortening to a date not earlier than February
23, 2015)
Interest Rate:
8.90%
Interest Payment Dates:
March 31, June 30, September 30 and December 31 of each year, commencing on
March 31, 2000
Extension period:
20 consecutive quarterly periods
Redemption provisions:
Set forth in Section 5.2 of the Trust Agreement
Sinking fund provisions:
No sinking fund provisions
Exchange for Designated Securities:
The Subordinated Debentures may be delivered in exchange for the Designated
Securities as provided in the Trust Agreement
Closing location for delivery of Designated Securities:
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, CA 90071
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Names and addresses of Representatives:
Designated Representatives:
Goldman, Sachs & Co
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co., Incorporated
Salomon Smith Barney Inc.
Charles Schwab & Co., Inc.
PaineWebber Incorporated
Prudential Securities Incorporated
Address for Notices, etc.:
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
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